Moody’s highlights Pakistan’s persistent debt issues, says budget to aid IMF negotiations

A Pakistani dealer counts US dollars at a currency exchange shop in Islamabad on October 9, 2018. (AFP/File)
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Updated 14 June 2024
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Moody’s highlights Pakistan’s persistent debt issues, says budget to aid IMF negotiations

  • The global credit rating agency points toward additional taxes without significant cost-containment measures
  • It says sustaining economic reforms may become difficult amid risk of social disruption, coalition challenges

KARACHI: A leading global credit rating agency said on Friday Pakistan’s newly announced federal budget was likely to help the country with its ongoing negotiation with the International Monetary Fund (IMF), though it highlighted the country’s weak debt affordability and challenge of keeping economic reforms on track.

Moody’s Investors Service issued a brief assessment of Pakistan’s economy two days after Finance Minister Muhammad Aurangzeb presented the $67.76 billion federal budget in which he kept some high ambitious revenue generation targets.

The global agency noted the government sought to achieve quicker fiscal consolidation through increase in revenue, adding their were little spending containment measures.

“The announced budget will likely support Pakistan’s ongoing negotiations with the IMF for a new Extended Fund Facility (EFF) program that will be crucial for the government to unlock financing from IMF and other bilateral and multilateral partners to meet its external financing needs,” it said. “However, it will be the government’s ability to sustain reform implementation that will be key to allowing Pakistan to meet its budget targets and continually unlock external financing to meet its needs, leading to a durable easing of liquidity risks.”

“A resurgence of social tensions on the back of high cost of living (which may increase because of higher taxes and future adjustments to energy tariffs) could weigh on reform implementation,” it added. “Moreover, risks that the coalition government may not have a sufficiently strong electoral mandate to continually implement difficult reforms remain.”

Moody’s noted the government had set a challenging target to increase federal government revenue to PKR17.8 trillion, about 46 percent higher from a year ago.

It noted that this increase was led by a 40 percent increase in tax revenue that the government wanted to achieve through a combination of new taxes and stronger nominal growth.

“At the same time, the budget is targeting an overall federal government expenditure of PKR18.9 trillion, about 25 percent higher than a year ago,” it said. “The increase in expenditure reflects lack of significant cost-containment measures and Pakistan’s very high interest payments.”

It maintained the government had been spending more than half its revenue on interest payments, “indicating very weak debt affordability which drives high debt sustainability risks.”

“Having a significant share of its budget allocated toward debt payments will constrain the government’s capacity to service its debt while meeting essential social spending and infrastructure needs,” it added.


Karachi hosts scaled-down Lux Style Awards as industry reflects on recognition, evolving formats, inclusion

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Karachi hosts scaled-down Lux Style Awards as industry reflects on recognition, evolving formats, inclusion

  • 24th edition of prestigious awards held at historic Mohatta Palace after the ceremony in May was canceled
  • Awards introduce new Digital Content Creators category amid changing entertainment and media landscape

KARACHI: Pakistan’s entertainment industry gathered in Karachi on Thursday for a smaller, more intimate ceremony marking the cc, as artists reflected on the importance of recognition, evolving formats and broader inclusion across creative fields.

The awards, considered Pakistan’s longest running and most prestigious entertainment honors, were held at the Mohatta Palace, a departure from previous large-scale events at the Karachi Expo Center. 

Actress Sanam Saeed, who co-hosted the evening, described the ceremony as “small and intimate,” a tone echoed by several attendees.

The scaled-down format followed an unusual year for the awards. The 23rd Lux Style Awards, scheduled to take place in Lahore in May, were canceled amid the brief war between Pakistan and India, with winners announced digitally and trophies delivered to recipients’ homes.

Among the prominent stars attending this year’s ceremony were Fahad Mustafa, Hania Aamir, Mawra Hocane and Yumna Zaidi. Aamir, who won Actor of the Year – Female (Viewers’ Choice), for the hit television drama Kabhi Main Kabhi Tum, said award platforms play a vital role in sustaining creative industries.

“It’s extremely important to appreciate the art that comes out of your country,” she told Arab News at the red carpet. The drama, she noted, resonated beyond Pakistan, trending in Bangladesh and India during its broadcast.

The picture shows entrance of the 24th Lux Style Awards in Karachi, Pakistan, on December 11, 2025. (AN photo)

Addressing fans abroad, Aamir, arguably Pakistan’s most popular celebrity internationally, said:

“Thank you so much for loving beyond borders. We love you as much even more. So thank you so much for appreciating all the hard work that we do.”

She also called for broader recognition across productions. 

“I’d like Lux [Style Awards] and every other award show to have a lot more diverse categories to appreciate every single person who is a part of the team. [And] who actually makes the project come to life.”

The Lux Style Awards have long attracted debate over transparency and credibility, a recurring discussion whenever nominations and winners are announced. 

Still, many artists said the platform remains essential for motivation and visibility.

“Whenever we discuss the awards, no award will be fair because some people will have certain reservations with it,” producer Abdullah Seja of iDream Entertainment told Arab News. “These might be the most authentic awards in Pakistan [but] obviously there is room for improvement in everything.”

Reflecting shifts in Pakistan’s creative economy, the awards introduced a separate category this year for Digital Content Creators. The inaugural trophy went to real-life couple Rabya Kulsoom and Rehan Nazim, known online as ‘Ron and Cocco’.

“The credit goes to Lux [Style Awards] for introducing the category because content creation is not easy,” Nazim said. “Whoever is doing it, it’s a difficult job. And now it has become a full-time job. You can’t take it lightly and do it on the side. So, we need to recognize the people who are doing it.”

Actress Yumna Zaidi, who won her first film award for Nayab, described the ceremony’s return to Karachi as significant. 

“I am so glad that it’s happening in Karachi because it’s been a while,” she said, adding, “Lux [Style Awards] are the strongest because it includes nominations from all the channels and it’s the strongest [competition].”

Mawra Hocane, whose drama Jafaa was nominated for TV Play of the Year (Critics’ Choice), said meaningful storytelling mattered more than trophies. 

“Platforms [like these] are very very important but more than that what’s important is that a project strikes a chord with the audience,” she said.

“I do my projects so that we can work on the position of women in society. [And] somehow elevate them, somehow create some space for them. And I think ‘Jafaa’ has done that.”

Music remained a central draw of the evening. 

Co-host Sanam Saeed said she was particularly looking forward to live performances. 

“Music is the kind of genre that bonds people together and puts Pakistan on the map,” she said. 
“We become one when it comes to music, forgetting all the distance, limitations and borders. [And] Our music does that.”

Singer and songwriter Hasan Raheem, popular among younger audiences, also performed during the ceremony and reflected on the value of such platforms. 

“These [platforms] are important, honestly,” he said. “I feel like things like these should happen because the real present and the gift that I personally get is the love from people that is the epitome of all the awards. I can never get a better award than that.”