New IMF program likely to improve funding prospects for Pakistan: Moody's

Islamabad: Global rating agency Moody's said that the new International Monetary Fund (IMF) program will improve funding prospects for Pakistan.

In its report on Pakistan's economy, Moody's stated that the new IMF program would provide reliable sources of financing and improve Pakistan's funding prospects, including access to funding from other countries and international financial institutions.

According to Moody's report, social tensions are likely to increase in Pakistan due to inflation. Higher taxes and future adjustments in energy rates could put pressure on reforms, while not having a strong electoral mandate to consistently implement difficult reforms can create risks.

The Moody's report further stated that Pakistan's external financing requirements for the current fiscal year are about $21 billion, and for the fiscal year 2026-27, the financial requirements are about $23 billion, while Pakistan has $9.4 billion. Foreign exchange reserves are well short of its requirements.

According to Moody's, Pakistan's external position remains fragile, with high external financing requirements posing policy challenges over the next three to five years. Weak governance and high social tensions that may affect the government's ability to push through reforms.