Challenges may grow with drop in ratings outlook

Industry presses govt to take emergency steps for improving economy

ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has expressed fear over the drop in Pakistan's credit rating outlook from stable to negative in an assessment given by Moody's credit rating agency.

In a statement, the ICCI termed it an unfortunate development as it indicated further challenges for the national economy and called on the government to take urgent measures to improve the economic outlook.



"Pakistan's prosperous future is linked with a strong economy and the caretaker government should be on a war footing to bring economic stability," said ICCI President Sheikh Amir Waheed.



He pointed to trade deficit as the main reason behind the decline in the ratings outlook and highlighted that during 11 months of the current financial year, Pakistan's trade gap widened to $34 billion and the current account deficit grew 43%.

"Foreign indebtedness of the country has reached a dangerous level of 70% of gross domestic product (GDP)," he said. "Foreign direct investment has declined 1.3% in 11 months of the current fiscal year."

Waheed cautioned that if the economy continued to remain fragile, Pakistan would have to go to the International Monetary Fund which would not be in larger interest of the country.

"Pakistan's foreign debt has crossed $92 billion, but it has not played any positive role in strengthening our economy," he said. "Going for more foreign debt will cause further trouble for the country. Government should focus on indigenous resources to improve the economy instead of relying on foreign debt."



He urged the government to take measures for broadening the tax base and provide all possible cooperation and support to the private sector for improving exports.

"With improvement in revenue and forex reserves, our economy could be able to achieve sustainable growth," he added.

Published in The Express Tribune, June 23^rd, 2018.

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