S&P raises Pakistan's outlook, forecasts higher growth

In a statement, the agency said the country had made significant progress in stablising its economic, fiscal and external performance, alongside eased financing conditions.

“We are therefore revising the outlook on the long term ratings on Pakistan to positive from stable,” the agency said, affirming a B- rating.

S&P also revised its earlier average growth estimates for 2015 to 2017 to 4.6 percent from 3.8 percent.

This reflected “strong capital inflows and remittances, and lower oil prices, which support business confidence and investment spending,” it said.

Pakistan’s GDP grew by 4.1 percent in the fiscal year ending June last year.

Net foreign exchange reserves with the central bank reached $12.36 billion dollars in recent weeks from just $3.2 billion in January 2014.

The International Monetary Fund (IMF) has voiced satisfaction with Pakistan’s progress on reforms required under a $6.6-billion bailout agreed in 2013.

The loan came on condition that Pakistan — which was suffering an energy crisis — would carry out extensive economic reforms, particularly in the energy and taxation sectors.

In March, Moody’s upgraded Pakistan’s dollar bonds rating one notch from stable to positive.

Militant-plagued Pakistan has been trying to boost its flagging economy since Prime Minister Nawaz Sharif was elected nearly two years ago. -AFP