Moody’s upgrades Pakistan’s banking sector outlook to positive

Global credit rating agency Moody’s has upgraded Pakistan’s banking sector outlook from stable to positive, citing resilient financial performance and improving macroeconomic conditions.

According to Bloomberg, “The positive outlook mirrors the Government of Pakistan’s own positive outlook,” Moody’s stated, noting that Pakistani banks maintain significant exposure to sovereign risk through substantial holdings of government securities.

Economic growth projections have brightened considerably, with Moody’s forecasting a 3% expansion in 2025, up from 2.5% in 2024 and a contraction of 0.2% in 2023.

According to Moody’s, inflation is expected to ease dramatically to around 8% in 2025, down from an average of 23% in 2024.

The improved outlook stems largely from Pakistan’s enhanced government liquidity and stronger external position compared to 2024. Moody’s highlighted the 37-month $7 billion IMF Extended Fund Facility approved in September 2024 as providing “a credible source of external financing for Pakistan for the next few years.”

Last year, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said that the Pakistan Economy Dashboard (PED) would help promote transparency, ensure data accessibility, and serve as an interactive platform for data analysis.

“Data is the new oil. The point is what you do with that data,” the minister remarked while addressing the launching ceremony of the Pakistan Economy Dashboard.

Initially, it can’t just be raw data that would need to be transformed through data analytics, for this purpose there is need to create an interactive platform like PED.