💨 Abstract

Moody's predicts that ongoing tensions between India and Pakistan could strain Pakistan's access to external financing and pressure foreign exchange reserves. Pakistan's reserves are insufficient to cover external debt for the next few years. India's economy remains stable, but increased defense spending could strain fiscal strength and slow consolidation. India has downgraded diplomatic ties with Pakistan following a terrorist attack, and tensions could negatively impact Pakistan's growth and fiscal consolidation.

Courtesy: theprint.in

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