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
Pakistan’s defense minister reports ‘death threat’ to British police, received during subway ride
- Individuals who heckled Khawaja Asif recorded a video, warning he could be stabbed with a knife
- Pakistani ministers have also complained of harassment by Imran Khan’s followers in the past
ISLAMABAD: Defense Minister Khawaja Asif has lodged a report with the British police over the alleged death threat and abuses hurled at him during a train ride in London, the Pakistan High Commission in the United Kingdom said on Thursday.
A viral video surfaced on social media a day earlier, showing an unidentified man hurling abuses at the Pakistani minister in the native Punjabi language, saying, “Take him away before someone stabs him with a knife.”
While Asif chose to ignore the incident and got off the next stop, he visited the Pakistan High Commission on Thursday to formally report the “death threat” to the UK police and demanding an investigation.
“Khawaja Muhammad Asif lodged a report of the train incident with the local police at the Pakistan High Commission,” said a statement released by the Pakistani diplomatic facility. “He informed the police about the details of the knife threat and harassment incident on the train.”
The incident that took place on the Elizabeth Line is now being investigated by the London Transport police, it added.
“I am on a private visit to London,” Asif was quoted as saying. “I was going to Reading via the Elizabeth Line with a loved one.”
He added that a family of three to four persons “harassed and threatened to kill with a knife and used abusive language” against him while making the video.
“I do not know anyone involved in the incident,” the Pakistan High Commission quoted him as saying. “London Transport Police should use CCTV footage to track down the suspects.”
Asif further said death threats and harassment were a “source of shame” for 1.7 million Pakistanis residing in the UK apart from British citizens.
This is not the first time Pakistani ministers belonging to Prime Minister Shehbaz Sharif’s coalition government, led by the Pakistan Muslim League Nawaz party, have been heckled or harassed in the UK.
In the past, Pakistan Information Minister Ataullah Tarar and Punjab Minister Marriyum Aurangzeb have endured the same treatment allegedly by the Pakistan Tehreek-e-Insaf party supporters of jailed former PM Imran Khan.
Seven killed in Pakistan’s northwest as militant’s car bomb explodes accidentally
- The explosion took place in Mir Ali where a militant was fitting a bomb in a car at his residence
- Blast damaged several nearby homes and wounded 14 people, with some in critical condition
PESHAWAR: A powerful car bomb accidentally detonated at the house of a Pakistani Taliban militant in northwestern Pakistan on Thursday, killing at least two children and five suspected militants, police said.
The explosion took place before dawn in the city of Mir Ali in Khyber Pakhtunkhwa province when a man identified a local commander of the militants, Rasool Jan, was fitting a bomb in a car at his house, police official Irfan Khan said.
He said other militants from the Pakistani Taliban group quickly arrived at the scene and removed the bodies of the insurgents who died. Authorities later found the bodies of two children in the rubble of the house, which collapsed in the explosion.
The blast also badly damaged several nearby homes and wounded 14 people, including women. Some of the injured were in critical condition in a hospital, Khan said, but he did not provide details.
The Pakistani Taliban and other insurgents in the region often target security forces with assault rifles, rockets, grenades and suicide car bombings, and Khan said it appeared the car bomb was being prepared for such an attack.
The Pakistani Taliban, known as Tehreek-e-Taliban Pakistan, are separate from the Afghan Taliban but have been emboldened by the group’s takeover of Afghanistan in 2021.
Also Thursday, security forces raided a hideout of insurgents in Harnai, a district in restive southwestern Balochistan province, triggering an intense shootout in which a soldier and three insurgents were killed. During the operation, an army major was killed when a roadside bomb exploded near his vehicle, the military said in a statement.
Pakistan’s President Asif Ali Zardari and Prime Minister Shehbaz Sharif paid tribute to whom they called the “martyred soldiers” in separate statements. They said the fight against terrorism will continue until the elimination of all insurgents.
Pakistan, Russia call for regional collaboration on Afghanistan amid shared security concerns
- The call comes as Moscow’s special representative for Afghanistan visits Pakistan for a day
- Despite security issues, Afghanistan’s neighboring states view its stability as vital for progress
ISLAMABAD: Pakistan and Russia on Thursday called for greater collaboration among regional states to address the situation in Afghanistan, amid shared concerns over militant violence emanating from the war-torn country.
The call came during a visit by Moscow’s special representative for Afghanistan, Ambassador Zamir Kabulov, who met with Pakistan’s foreign secretary, Amna Baloch, and held detailed discussions with the additional secretary, Ahmad Naseem Warraich, at the Ministry of Foreign Affairs in Islamabad.
“The two sides exchanged views on relations with Afghanistan and called for enhanced coordination among regional countries for a peaceful and prosperous Afghanistan,” the foreign office said. “The two sides agreed to remain engaged toward this end.”
The talks come as both nations grapple with security threats linked to Afghanistan. Russia has voiced alarm over Daesh and its attacks, including a concert bombing in Moscow earlier this year that was linked to militants with ties to Afghanistan.
While the Afghan Taliban and Daesh are sworn enemies, Pakistan accuses the Afghan administration of facilitating the Tehreek-e-Taliban Pakistan (TTP), a proscribed militant network blamed for cross-border attacks, an allegation Kabul denies.
Pakistan’s approach to Afghanistan has grown increasingly confrontational since last year as it pressures Kabul to rein in the TTP. By contrast, Russia announced last month it would remove the Taliban from its list of terrorist organizations, signaling a step toward normalizing ties with Afghanistan’s rulers.
Beyond security, Russia is keen to retain its influence in Central Asia and engage in Afghanistan’s economic reconstruction, particularly in energy and infrastructure projects.
Initiatives such as the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline and the Trans-Afghan Railway remain key priorities for Moscow, though persistent security challenges have delayed progress.
For Pakistan also, Afghanistan is critical for regional connectivity. Islamabad has offered landlocked Central Asian nations access to its ports, aiming to facilitate trade with global markets via sea routes.
Despite security concerns shared by Afghanistan’s neighboring countries, its stability is viewed as vital to unlocking the economic potential of regional projects.
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.
