Barclays upgrades Pakistan’s sovereign dollar bonds

ISLAMABAD: Pakistan’s economy received a positive boost as global financial institution Barclays upgraded its rating on the country’s sovereign dollar bonds.

According to reports, Barclays reversed the downgrade it had issued in May, citing improving economic indicators, stronger foreign exchange reserves, and growing confidence in Pakistan’s fiscal and financial stability.

The institution projected improved performance of Pakistan’s sovereign bonds, supported by rising investor confidence and expectations of further upgrades in the country’s credit rating.

Barclays said Pakistan’s access to international financial assistance has contributed significantly to macroeconomic stability and strengthened the overall economic outlook.

The upgraded assessment was highlighted in a Bloomberg report, which was later referenced by Adviser to the Finance Minister Khurram Shehzad in a post on X.

“The resilience of Pakistan’s external position cannot be ignored and it underpins the more optimistic view,” the Bloomberg report cited analysts, including Avanti Save, as saying.

Read more: Fitch affirms Pakistan’s ‘B’ rating with stable outlook, cites improving economic stability

It noted that the economy continued to demonstrate stability, noting the country’s improved fiscal position, steadier external buffers, “relatively steady” foreign reserves, and a “moderate growth/inflation picture”.

Earlier, Global credit rating agency Fitch Ratings affirmed Pakistan’s sovereign rating at ‘B’ with a stable outlook, highlighting signs of improving financial discipline and macroeconomic stability.

In its latest assessment, Fitch stated that maintaining the rating reflects better fiscal management and gradual economic stabilization, supported by ongoing reforms under the International Monetary Fund (IMF) programme.

The agency noted that Pakistan is likely to receive a $1.2 billion tranche from the IMF, which is expected to strengthen foreign exchange reserves and ease external financing pressures. The inflow would also help reduce the burden of external debt repayments.

Fitch, however, warned that Pakistan remains vulnerable to energy-related risks in the Middle East, which could impact economic stability.