Moody's Investor Service published a report assessing Pakistan's B3 foreign and local-currency issuer rating.

Pakistan's modest but low-income and savings-constrained economy is buffeted by large supply-side shocks, tax collection is inadequate and foreign investment in declining, the report said.

Weakening governance and rising internal policy has resulted in limited policy effectiveness, while volatile politics pose considerable event risk, the agency added.

However, external financial assistance coupled with buoyant remittances has bolstered the external payments position, reducing the risk of a balance of crisis in the near term, Moody's said.

The outlook on the country is stable, reflecting the adequacy of Pakistan's foreign currency reserves and its manageable domestic borrowing program, Aninda Mitra, a Moody's Vice President and senior analyst, said.

Though Pakistan's debt has grown due to the amount of external assistance the country received, the debt dynamics remain favorable, he added.