Pakistan’s Dollar Bonds Down As Devastating Floods Hit Economic Outlook

Pakistan’s dollar bonds fell to their lowest level in more than a month as the economy struggles to recover from devastating floods, putting pressure on the government’s fiscal health. According to Bloomberg statistics, the bonds due in 2031 were listed 0.6 cents lower on the dollar on Tuesday, at 50.82 cents — the lowest since 2 August. Last week, the notes rose to 58 cents on the dollar after the country received a loan of $1.1 billion from the International Monetary Fund (IMF), which reduced the risk of default. Bonds maturing in 2024 fell to 66.6 cents on the dollar, the lowest level since 5 August. The worst flooding in Pakistan’s history has killed over 1,300 people and is estimated to have cost the economy $10 billion. The government cut its fiscal year growth forecast for this fiscal year to 2.3 percent from 5 percent in June, citing floods that inundated a third of the country to have exacerbated the country’s economic crisis.