Pakistan PM Nawaz Sharif’s ouster raises risk profile for investors: Moody’s
Nawaz Sharif’s disqualification as Pakistan’s PM would pose a risk to policy continuity and have a negative impact on his rating, said Moody, a New York-based credit rating agency.
“If increased political uncertainty and conflicts between the different powers of the State interrupt the administration’s economic and fiscal agenda, macroeconomic stability and government access to external financing could be compromised, with a weight in the credit profile Pakistan, “the agency said on Tuesday.
Investigations into the financial affairs of Sharif and his family followed the publication in 2015 of Panama documents, which revealed the vast wealth declared and not their children, dawn online reported. “High internal political risk is embedded in Pakistan’s credit profile,” Moody said.
The agency explained that the probability that political events can affect the sovereign credit profile is high and these events have an impact on politics and hence on the economy and access government financing.
The policy of the South Asian nation has long been “characterized” by the blows and conflicts between the executive, the judiciary and the military.
The persistence of increased political risk has undermined the effectiveness and control of government corruption, remained.
After the first democratic transfer of power in the country in 2013, when the Pakistan-Nawaz Muslim League (PML-N) won the absolute majority, it appeared that Sharif could become the first head of government in the country’s history to Complete a five-year term.
“Their investment could now trigger another period of political instability, undermining Pakistan’s ability to meet pressing domestic economic problems, strengthening investor confidence and attracting external financial help from official creditors and donors,” Moody said.
Speaking of uncertainty over the continuity of policies beyond the immediate succession Sharif said that political continuity will remain in the short term, the former prime minister who has announced his brother Shahbaz Sharif as his successor and standard bearer PML- N.
Before becoming prime minister, he has to retire as chief minister of Punjab and be elected to parliament in the seat left by his brother. Shahid Khaqan Abbasi will be the prime minister before.
Given the support of the PML-N in Punjab, Shahbaz and popularity, his victory in the elections seems very likely.
However, with the upcoming elections for August 2018, the shift in PML-N and ongoing research leadership could disrupt the process of policy-making and economic reform.
Nawaz Sharif oversaw a major expansion of Pakistan’s economic relations with China through the China-Pakistan Economic Corridor (CPEC) project.
“However, the problems related to security and the decline of Pakistani public project implementation suggest that the pace of implementation will be relatively slow.