ISLAMABAD: S&P Global Ratings has upgraded Pakistan’s long-term sovereign credit rating to ‘B’ from ‘B-‘, the highest level in seven years, citing stronger institutional capacity, continued implementation of reforms under an International Monetary Fund (IMF) programme, improved fiscal performance and a significant rebuilding of foreign exchange reserves.
The ratings agency affirmed Pakistan’s short-term sovereign rating at ‘B’ and assigned a stable outlook, reflecting its expectation that continued economic reforms will support steady growth, fiscal consolidation and the country’s ability to meet its external financing needs.
In its latest ratings update, S&P Global said Pakistan had strengthened its institutional capacity through the implementation of critical reforms, which had helped restore macroeconomic stability, rebuild foreign exchange reserves and ease pressure on the country’s fiscal and external positions.
A US-based international credit rating agency, Standard and Poor’s (S&P) Global, has upgraded Pakistan's long-term instruments credit rating to 'B' from 'B Minus'@Financegovpk @StateBank_Pak @PakPMO @GovtofPakistan @MoIB_Official @SPGlobalRatings @kschehzad #RadioPakistan #News… pic.twitter.com/52rIklNKjG
— Radio Pakistan (@RadioPakistan) July 22, 2026
The agency said the government’s efforts to broaden the tax base had improved revenue collection and accelerated fiscal consolidation, contributing to a gradual decline in Pakistan’s debt burden.
“We therefore raised our long-term sovereign rating on Pakistan to ‘B’. At the same time, we affirmed the ‘B’ short-term rating,” S&P Global said in its statement.
“The stable outlook reflects our expectations that improved institutional settings will anchor economic reforms to bring about a sustained period of steady growth and fiscal consolidation,” it added.
S&P Global raises Pakistan’s external financing outlook
S&P Global also raised Pakistan’s transfer and convertibility assessment to ‘B’ from ‘B-‘, citing improvements in the country’s political and institutional settings.
The agency said sustained official financing was expected to help Pakistan meet its external obligations while allowing it to continue rolling over commercial credit lines over the next 12 months.
It added that tax reforms and continued foreign inflows had strengthened the country’s fiscal and external buffers against potential external shocks.
S&P forecast Pakistan’s economy would expand by 3.5% in fiscal year 2027. It also said it expected only marginal inflationary pressure from any energy price shock arising from the conflict in the Middle East.
Also Read: Barclays Upgrades Pakistan Debt Outlook on Stronger Economic Fundamentals
According to S&P Global, Pakistan was last assigned a ‘B’ long-term sovereign rating between October 31, 2016, and February 3, 2019.
Last year, the agency upgraded Pakistan’s sovereign credit rating to ‘B-‘ from ‘CCC+’, citing progress in implementing economic reforms and easing risks of sovereign default.
At the time, it also assigned a stable outlook, improving Pakistan’s standing from “very high credit risk, vulnerable to non-payment” to “highly speculative”.
Pakistan welcomes upgrade
Reacting to the decision, Khurram Schehzad, Adviser to Pakistan’s Finance Minister, described the upgrade as “another major vote of confidence in Pakistan’s economic turnaround.”
🇵🇰 𝗦&𝗣 𝗨𝗽𝗴𝗿𝗮𝗱𝗲𝘀 𝗣𝗮𝗸𝗶𝘀𝘁𝗮𝗻 𝘁𝗼 '𝗕' 𝘄𝗶𝘁𝗵 𝗦𝘁𝗮𝗯𝗹𝗲 𝗢𝘂𝘁𝗹𝗼𝗼𝗸
Another major vote of confidence in Pakistan's economic turnaround.
𝗣𝗮𝗸𝗶𝘀𝘁𝗮𝗻 𝗵𝗮𝘀 𝗿𝗲𝗴𝗮𝗶𝗻𝗲𝗱 "𝗕" 𝗥𝗮𝘁𝗶𝗻𝗴𝘀 𝗮𝗳𝘁𝗲𝗿 𝟵 𝘆𝗲𝗮𝗿𝘀 (𝗹𝗮𝘀𝘁 𝗶𝗻 𝟮𝟬𝟭𝟲-𝟭𝟳)
S&P… pic.twitter.com/Q12PjoxbLZ
— Khurram Schehzad (@kschehzad) July 22, 2026
In a post on X, he said Pakistan had regained its ‘B’ sovereign rating after nine years, attributing the upgrade to strengthened institutional capacity, successful implementation of critical reforms, faster fiscal consolidation, stronger foreign exchange reserves and improved macroeconomic stability.
“The Stable Outlook reflects confidence that continued reforms will support sustained growth and fiscal discipline,” Schehzad said, adding: “Stability strengthens. Reforms deliver. Confidence rises.”
Higher foreign exchange reserves and improved external stability have strengthened Pakistan’s economic resilience.
The upgrade is expected to attract greater foreign investment and support future sovereign bond and privatisation initiatives.
Pakistan’s improved credit rating enhances its credibility and standing in international financial markets.
Continued fiscal discipline and revenue reforms are laying the foundation for sustainable economic growth.
The rating upgrade sends a strong positive signal to global investors, lenders, and development partners.
Improved investor confidence is expected to expand Pakistan’s access to international capital markets.
Global recognition of Pakistan’s reform agenda strengthens confidence in the country’s long-term economic outlook.
The upgrade marks a significant milestone in Pakistan’s journey toward greater economic stability and sustained growth.
