Pakistan, Sri Lanka and Vietnam most at risk of a credit downgrade: report

Ishara S. Kodikara | AFP | Getty Images Sri Lanka Prime Minister Ranil Wickremesinghe, center, speaks to supporters at the prime minister's official residence in Colombo on December 16, 2018, after he was reappointed as prime minister by Sri Lanka's president, the same man who fired him from the job nearly two months ago.

Nov 10, 2008 (LBO) – Pakistan, Sri Lanka and Vietnam are most at risk of a credit downgrade in Asia by the rating agency Standard and Poor’s (S&P), amid global economic turmoil, a media report said. The island has been hit by withdrawing foreign hot money brought into bridge fiscal deficits.

Okorotchenko was quote as saying that Sri Lanka’s short-term commercial debt was a concern. The International Monetary Fund has also warned against short term foreign debt.

“Pakistan is the weakest, followed by Sri Lanka, then Vietnam,” Elena Okorotchenko, head of Asian sovereign ratings at S&P, was quoted as saying by Bloomberg, a financial newswire.

“Pakistan faces severe pressure from the external side, the fiscal side, the monetary side, economic growth and politics.

“There are five angles in which we analyze a country’s ratings and Pakistan is negative on all counts.”

S&P has downgraded Pakistan to CCC+. The country’s foreign reserves plummeted as its central bank tried to defend a dollar peg over more than a year.

Vietnam also had currency troubles as it intervened in the market early in the year without raising interest rates.

Sri Lanka has been defending a dollar peg