Moody’s Investors Service has identified Pakistan and Sri Lanka as two of the South Asian countries most susceptible to the balance of payments (BoP) crises, citing low exports and a deficiency in foreign direct investment as key contributors.
The international credit ratings agency, in a recent report, emphasized that India stands out as the least vulnerable among its South Asian counterparts due to a larger and more diversified export sector, coupled with superior macroeconomic policy management in New Delhi.
Moody’s latest assessment underscores the challenges faced by Bangladesh, Pakistan, and Sri Lanka, pointing out their weaker infrastructure compared to India, which results in higher trade costs. The report highlights that these South Asian nations face limitations in market access to other countries, primarily due to their fewer trade agreements.
