ISLAMABAD: Fitch Ratings, a global credit rating agency, has upgraded Pakistan’s long-term foreign currency issuer default rating (IDR) to ‘CCC+,’ the agency said on Monday, indicating an increase in the country’s foreign exchange reserves, while the central bank cut the key interest rate by 100 basis points to 19.5 percent in line with expectations of investors and analysts.
Fitch Ratings provides independent opinions on the creditworthiness of issuers and their debt obligations by evaluating the likelihood of repayment, and assigns ratings to help investors assess the risk of lending to or investing in a particular entity.
The upgrade reflects greater certainty over continued availability of external funding, in the context of Pakistan’s staff-level agreement with the International Monetary Fund (IMF) on a new 37-month, $7 billion extended fund facility (EFF).
“Strong performance on the previous, more temporary IMF arrangement helped the country narrow fiscal deficits and rebuild foreign exchange (FX) reserves, and further improvements are likely,” the ratings agency said in its report.
But it said the South Asian nation’s large funding needs put it in a “vulnerable situation,” if it failed to implement challenging reforms that could undermine program performance and funding.
“The government will have to obtain new funding assurances from bilateral partners, chiefly Saudi Arabia, the United Arab Emirates and China, totalling about USD 4-5 billion over the duration of the EFF,” the report read.
“We believe this will be achievable, given the strong past record of support and significant policy measures in the recent budget for the fiscal year ending June 2025 (FY25).”
Fitch said the incumbent Pakistani government aimed to tackle weaknesses in the country’s tax system, energy sector and state-owned enterprises under the new EFF through higher taxes on the country’s agricultural sector.
“We forecast the current account deficit to stay relatively contained at about $4 billion (about 1 percent of GDP) in FY25, after about $700 million in FY24, given tight financing conditions and subdued domestic demand,” the agency said.
Finance Minister Muhammad Aurangzeb said the rating upgrade came in the backdrop of currency stabilization, increase in foreign reserves and decline in inflation in Pakistan.
“This is a reflection of that journey in which we have been working hard for the last four to five months to get more permanence in the macroeconomic stability. Especially now with the staff-level agreement [with the IMF] having been in place, it has played a very important role in terms of helping with this upgrading,” he said in televised comments.
The minister said all macro-economic indicators in the country were “positive” and “in the right direction.”
“This [rating upgrade] is important because if we are to make this the last [IMF] program, there has to be a road to the market,” he said.
“As I also mentioned yesterday, export-led growth, foreign direct investment, which is again very much dependent on sovereign ratings, especially that foreign direct investment that can take us to exports and finally international capital markets, therefore, this particular upgrading is the beginning of that journey.”
‘GOOD NEWS FOR INDUSTRY’
The Fitch report came as Pakistan cut its key interest rate by 100 basis point to 19.5 percent, according to the central bank.
Finance Minister Aurangzeb described the rate cut as a “very good news for the industry.”
“As the inflation will decrease gradually, we will see the policy rate coming further down during this fiscal year. So that we go back into the private sector credit off-take, which has been stagnant for long,” he said in his televised comments.
“Both these developments that happened today, they are very positive for the economy as we go forward.”
The decision to cut policy rate was made in view of a decline in inflation, improving current account deficit and an increase in central bank reserves, according to the central bank chief.
“The current account deficit was $17.5 billion in fiscal year 22, which was reduced to $3.3 billion in 2023. This year, that number is only $700 million, which is 0.2 percent of the GDP,” State Bank of Pakistan (SBP) Governor Jameel Ahmed said at a press conference.
“Along with this, the state bank reserves have also witnessed improvement. In June 2023, our reserves were $4.4 billion, which have increased to $9.5 billion in June this year.”
He noted the country’s oil imports had gradually decreased and an improvement in external account inflows had strengthened the current account.
“Oil imports, which were at $2.3 billion in the first quarter of 2023, came down to $1.4 billion in the last quarter (Apr-Jun 2024),” Ahmed said. “This fiscal year, our GDP growth, which was 2.4 percent in the outgoing year, our assessment is that it will be between 2.5 percent and 3.5 percent.”
Similarly, the SBP chief said, the current account deficit was projected to be 0-1 this fiscal year, while average inflation would be 11.5-13.5 percent.
Fitch upgrades Pakistan’s foreign-currency debt rating, central bank cuts key interest rate
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Fitch upgrades Pakistan’s foreign-currency debt rating, central bank cuts key interest rate
- Fitch Ratings says Pakistan’s large funding needs put it in ‘vulnerable situation’ if it failed to implement reforms under new IMF deal
- Report came as Pakistan cut key interest rate by 100to 19.5 percent amid decline in inflation, improving current account, increase in reserves
PM Sharif urges nation to perform rain prayers as toxic smog chokes Pakistani cities
- Shehbaz Sharif urges Islamic scholars to play their role in organizing ‘Istisqa’ prayers across the country
- Toxic smog has enveloped Pakistan’s cultural capital, Lahore, and 17 other districts of Punjab province
ISLAMABAD: Prime Minister Shehbaz Sharif has urged the nation to perform prayers for rainfall, calling on Islamic scholars to take the lead in organizing “Istisqa” prayers, his office announced on Thursday, as worsening air quality continues to endanger the health of millions.
The Istisqa prayer is a special Islamic ritual performed to seek rain, primarily during times of drought or severe water shortages. It symbolizes the community’s humility, repentance and reliance on divine mercy for sustenance.
Toxic smog has enveloped Pakistan’s cultural capital, Lahore, and 17 other districts in Punjab since last month. Health officials report that more than 40,000 people have sought treatment for respiratory illnesses, prompting Punjab authorities to close schools until November 17 to safeguard children’s health.
“PM Sharif appeals to the nation to offer Istisqa prayers for rain,” his office announced in a statement. “Scholars should especially play their role in organizing Istisqa prayers.”
The prime minister noted the rainfall would improve the environment apart from aiding in getting rid of diseases.
“Istisqa prayers should be organized in all mosques under the auspices of the federal government and the provinces,” he was quoted as saying. “In the current situation, there is a dire need for rain.”
A day earlier, Pakistan’s Meteorological Department forecast light rains from Nov. 14-16 in most districts of the country’s populous Punjab province.
The UN children’s agency has warned that the health of 11 million children in Punjab is in danger due to air pollution.
South Asia, particularly India and Pakistan, gets shrouded in intense pollution every winter as cold air traps emissions, dust, and smoke from farm fires.
Pollution could cut more than five years from people’s life expectancy in the region, according to a University of Chicago’s Energy Policy Institute study last year.
Pakistan signs four-year pact with Global Green Growth Initiative to boost climate resilience
- The agreement will help Pakistan’s transition to a green economy, address water scarcity and deforestation
- Pakistan has ranked as the fifth most vulnerable country to climate change, with its cities engulfed in smog
ISLAMABAD: Pakistan has signed a four-year country program framework agreement with an international green economy organization to advance its sustainable development goals by enhancing climate resilience through green growth initiatives, according to an official statement released on Thursday.
The agreement was signed by Pakistan’s Climate Change Ministry Secretary, Aisha Humera Moriani, and the Global Green Growth Initiative’s (GGGI) Deputy Director-General, Helena McLeod, during a formal ceremony at the United Nations-led Global Climate Conference (COP29) in Baku, Azerbaijan.
Pakistan ranks as the fifth most vulnerable country to climate change, according to the Global Climate Risk Index. In 2022, catastrophic floods claimed over 1,700 lives, affected more than 33 million people, and caused economic losses exceeding $30 billion.
While international donors pledged over $9 billion last January to help Pakistan recover from the devastating floods, officials report that little of the pledged amount has been disbursed so far.
“The Ministry of Climate Change & Environmental Coordination and GGGI has signed a four-year Country Programme Framework agreement to advance Pakistan’s sustainable development goals through targeted climate action and green growth interventions,” said the official statement.
On the occasion, McLeod said her organization aimed to facilitate Pakistan’s transition to a green economy through collaboration with national stakeholders to address water scarcity, deforestation and energy challenges “compounded by climate change effects.”
Prime Minister Shehbaz Sharif’s Coordinator on Climate Change Romina Khurshid Alam thanked the GGGI for engaging with Pakistan to “mobilize green finance, support climate action frameworks and promote investment” to achieve climate resilience.
Pakistan also regularly faces other climate change-induced effects such as droughts, cyclones, torrential rainstorms and heatwaves.
Currently, record-high air pollution levels have triggered hundreds of hospitalizations, school closures and stay-at-home orders in the eastern city of Lahore and other cities in the populous Punjab province, which has been enveloped in thick, toxic smog since last month.
A mix of low-grade fuel emissions from factories and vehicles, exacerbated by agricultural stubble burning, blanket Lahore and its surroundings each winter, trapped by cooler temperatures and slow-moving winds.
The city of 14 million people stuffed with factories on the border with India regularly ranks among the world’s most polluted cities, but it has hit record levels this month, as has New Delhi.
Army officer, soldier killed in southwest Pakistan clash that leaves three militants dead
- Incident in Balochistan occurred after security forces reacted to militant presence in Harnai district
- A Pakistan army major and a havildar lost their lives when an improvised explosive device blew up
QUETTA: An army officer and a soldier lost their lives in Pakistan’s southwestern Balochistan province on Thursday, according to a statement from the military’s media wing, during an encounter that also left three militants dead.
Balochistan, which borders Iran and Afghanistan, has been the site of a low-level insurgency by separatist militants for over two decades. In August, ethnic nationalist militants carried out several coordinated attacks on civilian and military targets in the province, killing more than 50 people on August 25-26.
Most of the assaults were claimed by the Balochistan Liberation Army (BLA), the leading separatist group operating in the province, which is home to key China-led infrastructure projects, including a port and a gold-copper mine.
“On 14 Nov 2024, on reported presence of terrorists, planning to target innocent civilians in Harnai District, security forces under Major Muhammad Haseeb were immediately mobilized to sanitize the area,” the Inter-Services Public Relations (ISPR) informed.
“Own troops effectively engaged the terrorists’ location and resultantly three terrorists were sent to hell,” it continued. “However, during the operation, an improvised explosive device exploded on the leading vehicle of security forces, resultantly, Major Muhammad Haseeb (age: 28 years, resident of District Multan), a brave officer, who was leading his troops from the front, along with Havildar Noor Ahmed (age: 38 years, resident of District Barkhan), having fought gallantly, made the ultimate sacrifice and embraced Shahadat [martyrdom].”
The incident comes just four days after a deadly suicide bombing at the Quetta railway station killed dozens of people, including army soldiers, and wounded several others.
A day earlier, security forces killed eight militants and injured six others during an intelligence-based operation in Pakistan’s restive northwestern Khyber Pakhtunkhwa (KP) province.
KP has been predominantly targeted by Tehreek-e-Taliban Pakistan (TTP) militants, who have carried out attacks on security forces’ convoys and check posts, as well as killing and kidnapping officials and civilians in recent months.
The TTP leadership is reportedly based in neighboring Afghanistan, straining ties between Kabul and Islamabad, as Pakistani officials accuse the Afghan Taliban of “facilitating” cross-border militant attacks.
Afghanistan denies the allegations and has urged Pakistan to address its security challenges internally.
Pakistani security forces kill eight militants in restive northwest
- Army says six militants also injured during operation in Miran Shah area of North Waziristan
- South Asian nation blames surge in militancy on TTP fighters operating out of Afghanistan
ISLAMABAD: Security forces killed eight militants while six others sustained injuries during an intelligence-based operation in Pakistan’s restive northwestern Khyber Pakhtunkhwa province, the military’s media wing said on Wednesday.
According to Inter-Services Public Relations (ISPR), the operation was conducted in the Miran Shah area of North Waziristan district.
Khyber Pakhtunkhwa, which borders Afghanistan, has witnessed several attacks by Tehreek-e-Taliban Pakistan (TTP) militants who have targeted security forces’ convoys and check posts, besides killing and kidnapping officials and civilians in recent months.
“Security forces conducted an intelligence-based operation in general area Miran Shah, North Waziristan District on the reported presence of khwarij [militants],” the ISPR said.
“During the conduct of the operation, own troops effectively engaged khwarij’s location, as a result of which, eight khwarij were sent to hell, while six khwarij got injured.”
A “sanitization operation” was also conducted in the area to eliminate any other militants, it added.
Earlier this month on Nov. 10, Pakistani security forces killed four militants in two separate encounters in Khyber Pakhtunkhwa. Prior to that, four Pakistani soldiers and five militants lost their lives in a gunbattle in South Waziristan’s Karama area.
The TTP leadership is said to be based in neighboring Afghanistan, affecting the ties between Kabul and Islamabad since the Pakistani officials have accused the Afghan Taliban of “facilitating” cross-border militant attacks.
Afghanistan denies the allegation and has urged Pakistan to resolve its security challenges internally.
Maxwell’s power-hitting and Australia pace flatten Pakistan in a rain-shortened T20
- Match started after a three-hour delay and was shortened to seven over per side
- Pakistan made 64-9 in response to Australia’s 93-4, losing five wicket in first 15 balls
BRISBANE: Glenn Maxwell’s robust 43 off 19 balls helped Australia thump Pakistan by 29 runs in a rain-shortened first Twenty20 on Thursday.
After a nearly three-hour delay due to lightning and rain, the match was shortened to seven overs per side.
Maxwell powered Australia to 93-4 and Pakistan reached only 64-9 after slumping to 16-5 inside the first 15 balls.
Nathan Ellis (3-9) and Xavier Bartlett (3-13) ran through the top order before No. 8 batter Abbas Afridi’s unbeaten 20.
“Certainly had a lot of fun out there,” Maxwell said. “We thought we had enough on the board … the bowlers did a great job. There was a few of us who had packed our bags expecting the game to be called off, so it was a mad rush to get ready.”
Maxwell followed scores of 0, 16, 0 in the preceding one-day international series won by Pakistan 2-1 by smacking three sixes and five boundaries. He played some extravagant lap shots to third man against the pace of Haris Rauf (1-21) and Naseem Shah (1-37).
Maxwell fell in the penultimate over when he hooked Abbas Afridi (2-9) to backward square leg but Marcus Stoinis provided a final flourish with an unbeaten 21 off seven balls. Stoinis smashed 20 runs in Shah’s last over with two fours and six.
None of the top six Pakistan batters reached double figures.
Sahibzada Farhan hit Spencer Johnson for two successive boundaries off the first two balls he faced before mistiming a pull shot off the fourth ball and holing out at midwicket.
Mohammad Rizwan, in his first match as the Pakistan skipper, fell to the first ball when he top-edged Bartlett to point. Usman Khan was caught at third man in the same over.
Ellis struck twice in his first over when Babar Azam was caught in the deep and Jake Fraser-McGurk snapped his third catch as Irfan Khan also offered a tame catch at deep midwicket.
Pakistan was 24-6 in the fourth over when Salman Ali Agha scored only 4 in his debut T20, guiding a sharp, short Bartlett delivery to Australia first-time captain Josh Inglis on the run.
Leg-spinner Adam Zampa clean-bowled Shaheen Shah Afridi and Naseem Shah off successive balls in the last over to complete the rout.
“It was difficult to keep things normal in a seven-over game,” Rizwan said. “Got to give credit to Maxy, his style worked really well.”
The second T20 is in Sydney on Saturday, and the last in Hobart on Monday.
