S&P lifts Pakistan's credit rating to 'B'

Global credit rating agency Standard and Poor’s (S&P) has upgraded Pakistan’s long-term sovereign credit rating from ‘-B’ to ‘B’, marking the country’s highest rating level in nearly eight years.

The agency has maintained Pakistan’s stable outlook, while affirming its short-term sovereign credit rating at ‘B’.

S&P said the stable outlook reflects its expectation that Pakistan will continue implementing economic reforms, supporting further improvements in fiscal stability and overall economic performance.

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The S&P report further states that the recent government of Pakistan’s vital economic reforms have increased foreign exchange reserves, improved fiscal discipline, and boosted revenue collection.

According to the international rating agency, the ratio of total government debt has gradually declined compared to Pakistan’s Gross Domestic Product (GDP).

S&P said Pakistan has strengthened its institutional capacity through ongoing reforms, while the effective implementation of measures under the International Monetary Fund (IMF) program has played a significant role in the ratings upgrade.

The latest decision returns Pakistan to the ‘B’ rating category for the first time in almost eight years.

The country previously held the same rating between 31 October 2016 and 3 February 2019.

Economists say the upgrade is likely to strengthen Pakistan’s credibility in international financial markets, boost investor confidence, and improve prospects for foreign investment.