Escalating tensions with India to impact Pakistan’s economic growth: Moody’s

Global rating agency Moody’s on Monday said that escalating tensions between India and Pakistan would weigh on Pakistan’s economic growth. An attack on April 22 in occupied Kashmir’s Pahalgam killed 26 people, mostly tourists, in one of the deadliest assaults since 2000. India has implied cross-border links without evidence, while Pakistan has rejected the claim and called for a neutral probe. Tensions have since spiked, with Pakistan reinforcing its forces as it expected an incursion and India’s premier granting “operational freedom” to his military. As temperatures remain high, with the military warning of a “swift” response to any misadventure by New Delhi, diplomatic channels have remained engaged to prevent conflict. In a note, the rating agency stated: “Sustained escalation in tensions with India would likely weigh on Pakistan’s growth and hamper the government’s ongoing fiscal consolidation, setting back Pakistan’s progress in achieving macroeconomic stability.”