[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]
Moody’s reports Pakistan as the most susceptible to BOP crises in South Asia. According to their recent study, Pakistan and Sri Lanka are the most at risk among the four sovereigns due to low exports, FDI, weaker policy management, and higher political risk. In contrast, India is the least vulnerable, boasting a larger and more diverse export sector, coupled with superior macroeconomic policy management that helps it accumulate and maintain sufficient foreign exchange reserves.
The low trade openness and limited export diversity, combined with subpar macroeconomic policy management and heightened political risks, have resulted in inadequate foreign exchange reserves for Pakistan and Sri Lanka. India, on the other hand, is the least exposed to these vulnerabilities, supported by its larger and more varied export sector and robust macroeconomic policy management, ensuring ample foreign exchange reserves.
Read more : The IMF criticises Pakistans budget, implying that a bailout is unlikely.
Furthermore, Pakistan and Sri Lanka suffer from inferior infrastructure compared to India, leading to higher trade costs. In South Asia, Pakistan and Bangladesh have the lowest export levels, accounting for 10.5% and 12.9% of their respective GDPs, as reported by the credit rating agency. Sri Lanka and India, with more developed service export sectors, display healthier export levels at 21.5% and 22.4% of their GDPs.
[/vc_column_text][/vc_column][/vc_row]
