PAKISTAN NEED BAILOUT ?

[waraich66]

Announcement:
Moody's Report: Pakistan's B3 reflects economic and institutional challenges
Global Credit Research - 06 Feb 2012

Singapore, February 06, 2012 -- Moody's Investors Service says in its annual report that Pakistan's B3 rating reflects the country's low economic, institutional and government financial strengths, and its high susceptibility to event risk.

The rating outlook is stable, although pressures on the balance of payments have reemerged. The broad policy framework has not been robust enough to ensure support from donors and creditors, or to effectively contain macroeconomic imbalances, which have arisen since the global financial crisis in 2008.

Moody's made its assessment in its latest analysis of Pakistan, and which assesses the country according to four factors: Economic Strength, which is characterized as "low"; Institutional Strength, "low"; Government Financial Strength, "low"; and Susceptibility to Event Risk, "high."

Pakistan's "low" Economic Strength reflects its relatively weak economic growth trend since the 2008 global financial crisis, and which has also been constrained by policy-framework and structural weaknesses. Macroeconomic imbalances are manifest in a chronically high level of inflation and renewed pressures on the payments position in the second half of 2011.

With the second factor, the Moody's report says that Pakistan's "low" Institutional Strength is partly a reflection of the factious character of politics in Pakistan. Tensions between the civilian government and military pose a threat to political stability.

Pakistan's "low" Government Financial Strength, the third factor, reflects the presence of a high debt burden and very large refinancing requirements. The cost of the 2010 floods, the delay in the introduction of the Reformed General Sales Tax (RGST), and faltering donor support further pressure government finances.

In terms of the country's "High" Susceptibility to Event Risk, the fourth factor, Moody's looks at political risk -- including domestic and geopoltical threats -- economic and banking system risks. The report says that the recent deterioration in Pakistan's relations with the US and the end of the IMF program remove support to the external balance of payments. Although official foreign exchange reserves presently remain adequate, their decline since mid-2011 underscores that the risk of a currency crisis remains high.

The report is entitled Pakistan. It can be found at Moody's - credit ratings, research, tools and analysis for the global capital markets

Thomas J. Byrne
Senior Vice President - Regional Credit Officer
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (65) 6398-8308

Bart Oosterveld
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (65) 6398-8308

 

[waraich66]

PIA,STEEL MILL , RAILWAY PSO all need bailout

 

[Safriz]

does palistan need a bailout?
No Pakistan needs a kick out..
kick out zardari and all will be fine.

 

[jetti]

no bailout,psu's should be privatised. Land should be distributed and end of jagirdari should happen. they shouldnt be given free money

 

[waraich66]

Agreed ,5% have 95% wealth , but who will change taxation system ?

 

[jetti]

that will eventually happen as a civilian govt spends longer time in power slowly erodingarmy's powers in civilian matters.

 

[waraich66]

I can bet new government have to beg for bailout ( 12th time)?

 

[z9-ec]

I can bet new government have to beg for bailout ( 12th time)?

Yup, you're right. The new government post elections will bear the brunt of PPP's 5 years of sheer incompetence. I believe it will take about 3-4 years just to undue what they did. Pakistan has to pay back loans with interest, fix PIA, railways, steel mill and etc. Long turbulent road ahead folks. Do not expect miracle in days as some politicians may have you believe.

 

[Nishan_101]

Pakistan only needs to privitize its Public sector to gain money and to bring out positive result from these sectors, they can do that by selling the 70% shares of these sectors to local people or business men and put this money in reserves or to invest in development of dams, canals, bridges, roads and in other ways.

 

[waraich66]

Pakistan only needs to privitize its Public sector to gain money and to bring out positive result from these sectors, they can do that by selling the 70% shares of these sectors to local people or business men and put this money in reserves or to invest in development of dams, canals, bridges, roads and in other ways.

Fiscal Deficit > 2 Billion Dollars
Tax GDP ratio < 10
Inflation > 25%
Reserves not more than 4 months

Still you think investor will invest in Pakistan , wake up please ????

 

[Nothing]

Fiscal Deficit > 2 Billion Dollars
Tax GDP ratio < 10
Inflation > 25%
Reserves not more than 4 months

Still you think investor will invest in Pakistan , wake up please ????

It don't need unless and until current government spends lots of money before election for vote bank politics which happens generally and politicians sends lots of money underground for election expenses.