S&P hints at upgrading Pakistan’s credit rating after elections

ISLAMABAD: S&P Global Ratings, a credit rating agency, has hinted at upgrading Pakistan’s credit rating following the new political government that comes into power after February 8 general elections, ARY News reported on Wednesday.

“Pakistan’s road to securing higher credit ratings will depend on whether the elections this week will bring about a government that can push for tough reforms,” the Bloomberg reported citing a S&P recent report.

A government with popular support and the ability to work with key institutions will have a better chance of securing financing from the IMF, S&P Analysts including Kim Eng Tan wrote in a February 4 report.

“Together with new policy moves to improve investor confidence and bring down inflation, this could lift fiscal and external metrics sufficiently for the sovereign ratings to move to the ‘B’ rating category,” S&P said.

Pakistan is currently rated ‘CCC+’ by the agency. The credit rating ‘B’ suggests the nation has the capacity to repay the foreign debt on time but still faces a degree of uncertainty that could lead to missing the repayment obligation later on.

To upgrade the rating, the global rating agency will closely watch the new government’s moves towards securing the next International Monetary Fund loan programme after the ongoing one, worth $3 billion, is completed in March 2024.

The IMF’s short-term nine-month programme is set to end in March 2024. This will also be the time when the new government will have come into power and announced its economic roadmap.

Almost all top rating agencies have downgraded the country’s ratings due to prolonged political and economic crisis.

All is set for holding general elections in Pakistan, scheduled for February 8, 2024, with over 128 million male and female voters expected to exercise their voting rights.

According to Election Commission of Pakistan (ECP), 5,121 candidates are in the race for the National Assembly seats, of which 4,807 are males and 312 females. Two transgenders are also contesting the polls.

For the four provincial assemblies of Sindh, Punjab, Khyber Pakhtunkhwa (KP), and Balochistan, a total of 12,695 candidates are contesting for the polls, out of which 12,123 are males and 570 are women.

There are a total of 128,585,760 registered voters in the country, out of which Punjab has the most, 73, 207,896. Sindh comes second with 26,994,769 registered voters while Khyber Pakhtunkhwa third with 21,928,119 voters. Balochistan has 5,371,947 registered voters while Pakistan’s capital Islamabad has 1,083,029 voters.