The precarious balance

A STRING of data releases in the previous week might suggest that the country has turned the corner. This is partially true. But it’s the other part, not covered by these data releases, where the problems really reside. Consider three separate data and information points. The latest inflation reading shows its growth rate has dropped to single digits finally. The trade deficit declined on both a year-on-year basis as well as month-on-month. Last but not least Moody’s upgraded the country’s credit rating to CAA2 citing “Pakistan’s improving macroeconomic conditions and moderately better government liquidity and external positions, from very weak levels”. This still keeps the rating within junk territory, just a little less junky, that’s all.