Pakistan better placed to withstand global shocks: Moody’s

Pakistan’s economy is now in a stronger position to deal with global and regional economic challenges, according to Moody’s Assistant Vice President Grace Lim.

In an assessment of Pakistan’s economic outlook, Lim said the country had made significant progress towards economic stability over the past two years.

She noted that Pakistan’s economy was in a better position than it was during the oil crisis of 2022. She also said the impact of a potential crisis involving the Strait of Hormuz was likely to be less severe for Pakistan compared with the 2022 oil shock.

According to Lim, lower inflation and a relatively stable exchange rate are among the country’s key economic strengths. These factors have helped improve overall economic stability and provided greater resilience against external pressures.

She also highlighted the improvement in Pakistan’s foreign exchange reserves. The increase in reserves, she said, was providing the country with additional economic buffers to deal with external shocks.

Lim said Pakistan was better prepared to face global and regional economic risks. She added that the economic stabilisation achieved during the last two years had strengthened the country’s ability to respond to emerging challenges.

The Moody’s official said Pakistan had also made progress towards greater economic sustainability. Improved economic conditions have increased the country’s capacity to absorb external pressures and manage potential disruptions.

Her assessment comes at a time when rising geopolitical tensions and uncertainty in global energy markets have increased concerns about oil supplies and prices.

Any disruption to shipping through the Strait of Hormuz could have wider implications for international energy markets. However, Lim’s assessment suggests that Pakistan’s improved economic position and stronger foreign exchange buffers could help cushion the impact of such external shocks.