Fitch affirms Pakistan’s ‘B’ rating with stable outlook, cites improving economic stability
- By Shoaib Nizami -
- Apr 13, 2026
ISLAMABAD: Global credit rating agency Fitch Ratings has 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.
On the macroeconomic front, the agency projected:
- Inflation to average 7.9 percent in FY2026
- Interest rate at around 10.5 percent
- GDP growth to reach 3.1 percent, driven by improving business confidence
Despite these positive indicators, challenges persist. Fitch estimates:
- External debt repayments could rise to $12.8 billion
- Fiscal deficit to remain at approximately 5.3 percent of GDP
- Current account deficit to widen to around 1.1 percent of GDP
Overall, Fitch emphasized that continued adherence to IMF-backed reforms will be critical for sustaining economic stability and improving Pakistan’s credit profile.
Also Read: Fitch downgrades Bahrain to ‘B’
Earlier, Global credit ratings agency Fitch downgraded Bahrain’s long-term foreign-currency issuer default rating to “B” from “B+”, citing high public debt, large fiscal deficits and low foreign exchange reserves.
The kingdom’s high reliance on hydrocarbon income as well as lower oil revenue, higher interest costs and a substantial increase in public sector pay have lifted its fiscal deficit in recent years.
“The downgrade reflects Fitch’s expectation that very high government debt/GDP will continue to rise, despite the implementation of a fiscal consolidation package,” Fitch said in a statement.
Late last year, Bahrain announced fiscal reforms including higher fuel prices and tariffs on electricity and water to bolster public finances.
The agency maintained the kingdom’s outlook at “stable.”