ISLAMABAD: “Political strife constrains Pakistan’s credit profile,” Moody’s Investors Service said in an email to Bloomberg.
The ousting of Pakistan’s prime minister by the country’s top court dramatically raises the risk profile for investors and businesses in the tumultuous, but fast-growing South Asian economy, reports Bloomberg.
A graft probe that led to Nawaz Sharif’s disqualification from holding public office, prompting his resignation, poses big challenges to the country’s credit profile according to Bloomberg.
“Political strife constrains Pakistan’s credit profile,” Moody’s Investors Service said in an email to Bloomberg, adding the removal of Sharif will “detract from policy-making in economic and fiscal matters” and reduce “the effectiveness of government policy in general.”
The political developments are unlikely to significantly alter nuclear-armed Pakistan’s already-fraught relationship with India. At the same time, they are not expected to dent ally China’s planned infrastructure investments in Pakistan totalling around $50 billion.
Still, investors viewed the removal of Sharif as a near-term negative, which makes Pakistan an even more precarious place to invest, Bloomberg said in the report.
Then prime minister Nawaz Sharif was disqualified from holding public office by the Supreme Court on Friday.
Sharif was disqualified under Article 62 (1) (f) of the Constitution over his failure to disclose un-withdrawn receivables constituting assets from a UAE-based company. It implied he was not ‘honest’ and ‘truthful’, as per the country’s Constitution.