ISLAMABAD: Global credit rating agency S&P Global Ratings has upgraded Pakistan’s long-term sovereign credit rating from B- to B, acknowledging improvements in the country’s economic fundamentals, stronger foreign exchange reserves, and progress made under the International Monetary Fund (IMF)-supported reform programme.
In its latest assessment, S&P Global said Pakistan’s ongoing structural reforms in collaboration with the IMF have begun delivering tangible results, leading to improved fiscal performance and greater macroeconomic stability.
The agency highlighted a significant increase in Pakistan’s foreign exchange reserves, noting that the improvement has strengthened the country’s external financial position and reduced near-term economic vulnerabilities.
S&P maintained Pakistan’s short-term sovereign credit rating at ‘B’ while assigning the country a stable outlook, reflecting its expectation that economic growth and policy reforms will continue in the coming years.
According to the ratings agency, the upgrade was supported by several key factors, including stronger institutional capacity, continued implementation of IMF-backed reforms, improved fiscal management, and the substantial buildup in foreign exchange reserves.
“The ongoing reform programme has started producing positive outcomes,” S&P noted, adding that the country’s financial performance has improved as a result of policy measures aimed at restoring macroeconomic stability.
The agency also expressed confidence that the current policy direction would help sustain Pakistan’s economic recovery and support continued growth.
With the latest revision, Pakistan’s long-term sovereign credit rating has reached its highest level in nearly eight years. The country previously held a ‘B’ rating between October 31, 2016, and February 3, 2019, before being downgraded in subsequent years amid economic challenges.
A higher sovereign credit rating generally enhances investor confidence, improves a country’s access to international financial markets, and can reduce borrowing costs for both the government and private sector.
The upgrade is expected to strengthen Pakistan’s standing among international investors and financial institutions as the country continues implementing reforms aimed at improving fiscal discipline, expanding foreign exchange reserves, and maintaining economic stability.
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