Lack of a strong electoral mandate to consistently implement tough economic reforms could pose risks, Moody’s – Pakistan

The global rating agency Moody’s has given a positive forecast on the Pakistani economy, warning that there is a risk of increasing social tension due to inflation and the lack of a strong electoral mandate to continuously implement difficult reforms may create risks.

According to Moody’s report, the new IMF program will improve the financing possibilities for Pakistan, the new IMF program will provide reliable sources of financing.

According to Moody’s, these include obtaining funding from other countries, international financial institutions, and social tensions due to inflation.

According to the report, higher taxes, future adjustments in energy prices might put pressure on reforms, while the lack of a strong electoral mandate to consistently implement difficult reforms might pose risks.

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According to Moody’s, Pakistan’s external financing needs for the current financial year are regarding $21 billion, and the financial needs for the financial year 2027-26 are regarding $23 billion.

According to the report, Pakistan’s foreign exchange reserves of 9.4 billion dollars are much less than its needs, Pakistan’s external position is still fragile, with high external financial needs, there will be difficulties in policies in the next 3 to 5 years.

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According to Moody’s, weak governance and social tensions might affect the government’s ability to push through reforms