ISLAMABAD-UNS: Moody’s Ratings has upgraded Pakistan’s sovereign credit rating from Caa1 to B3, while maintaining a stable outlook, citing an improved external position, stronger fiscal indicators and lower domestic financing costs.
According to the global ratings agency, Pakistan’s external vulnerabilities have eased as foreign-exchange reserves have steadily increased amid continued macroeconomic stabilisation. Lower domestic borrowing costs, supported by monetary easing and an improved fiscal position, have also contributed to a significant improvement in the country’s debt affordability.
Moody’s said Pakistan’s credit profile is demonstrating greater resilience to external shocks than in previous economic cycles, including pressures arising from the ongoing conflict in the Middle East.
The upgrade comes as Pakistan continues rebuilding its foreign-exchange reserves and implementing economic reforms following several years of severe financial pressure. The country’s foreign-exchange reserves have reportedly risen to $17.1 billion.
Pakistan’s dollar-denominated bonds also recorded gains following the development, with the bond maturing in 2051 posting a notable increase.
The Moody’s decision follows an upgrade of Pakistan’s sovereign credit rating by S&P Global Ratings in July, which also cited improving economic and financial conditions.
Despite the latest upgrade, Pakistan’s sovereign debt remains in speculative-grade territory. Moody’s cautioned that the country’s credit profile continues to face risks from fragile external finances, weak debt affordability and a relatively narrow revenue base.
PM Welcomes Upgrade:
Prime Minister Shehbaz Sharif welcomed Moody’s decision, describing it as a sign of growing international confidence in Pakistan’s economic policies and reforms.
The prime minister praised the government’s economic team and said sustained reforms and measures to strengthen the external sector had helped move the economy towards greater stability.
