ISLAMABAD: Global ratings agency S&P Global has upgraded Pakistan’s sovereign credit rating from ‘CCC+’ to ‘B-’, and placed the South Asian country on a “stable” outlook.
The agency cited the stabilisation of the country’s finances and foreign exchange reserves, supported by continued support from the International Monetary Fund (IMF), as key factors behind the upgrade.
“The stable outlook reflects our expectations that continued economic recovery and government efforts to enhance revenue will stabilise fiscal and debt metrics,” S&P said in a statement.
“We also expect that sustained official financing will support Pakistan in meeting its external obligations, and that the country will continue to roll over its commercial credit lines over the next 12 months.”
Pakistan’s longer-term international bonds rallied following the credit upgrade, with the 2051 maturity rising by 1.6 cents to trade at 84.85 cents on the dollar, according to Tradeweb data.
The 2031 and 2036 bonds also saw a gain of around 1 cent, while shorter-term maturities posted more modest increases.
Last week, Finance Minister Muhammad Aurangzeb urged Moody’s, the leading US credit rating agency, to upgrade Pakistan’s credit rating to support the country’s return to international capital markets on more favourable terms.
It may be recalled that Moody’s had upgraded Pakistan’s credit rating by one notch in August 2024 to Caa2 from Caa3 (downgraded in February 2023 due to suspension of the IMF programme) and changed its outlook to positive from stable for improving macroeconomic conditions, including liquidity and external position from very weak levels.
Meanwhile, Global ratings agency Fitch had also upgraded Pakistan’s foreign currency credit rating to ‘B-’ from ‘CCC+’ in April, expressing confidence in the country’s progress on narrowing its budget deficits.
