Moody’s Upgrades Pakistan’s Credit Rating Amid Improved Economic Outlook
Islamabad: In a significant boost to Pakistan’s financial standing, Moody’s Investors Service has upgraded the country’s long-term issuer rating from “Caa3” to “Caa2,” with a stable outlook. This upgrade reflects an improvement in Pakistan’s macroeconomic conditions and a moderate recovery in the government’s external positions from previously very weak levels.
Moody’s also upgraded the rating for Pakistan’s senior unsecured Medium-Term Note (MTN) programme from (P)Caa3 to (P)Caa2. The rating agency noted that Pakistan’s default risk has now been reduced to a level consistent with a Caa2 rating. The outlook for the Government of Pakistan has also been revised to positive from stable, indicating a more optimistic future for the country’s economic situation.
This positive development follows a similar move by Fitch Ratings in July, when Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) was upgraded from “CCC” to “CCC+.” Fitch attributed this upgrade to increased certainty over the availability of external funding, supported by Pakistan’s staff-level agreement with the International Monetary Fund (IMF) on a new 37-month USD 7 billion Extended Fund Facility (EFF).
These upgrades by both Moody’s and Fitch highlight the growing confidence in Pakistan’s ability to manage its economic challenges, particularly in securing the external funding necessary for economic stability and growth.
