S&P upgraded Pakistan’s sovereign credit rating to ‘B’, Outlook Stable.
ISLAMABAD – Global credit rating agency S&P Global Ratings has upgraded Pakistan’s long-term sovereign credit rating to ‘B’ from ‘B-‘, citing economic stability and improved financial management.
According to the latest S&P report, Pakistan has made significant progress over the past two years through stronger institutional stability, effective implementation of the International Monetary Fund (IMF) reform program, and improved fiscal discipline.
The agency said these measures have significantly increased foreign exchange reserves and reduced external financial pressures.
The government’s efforts to broaden the tax base and increase revenue collection have helped narrow the fiscal deficit, which is expected to gradually reduce the country’s debt burden, the report said.
S&P said the upgrade reflects improvement in Pakistan’s economic and financial indicators. The country’s foreign exchange reserves reached $25.3 billion at the end of June 2026, a sharp increase from $6.7 billion in December 2022, when the reserves hit a record low.
The agency added that the current level of reserves is sufficient to meet Pakistan’s external financing needs in the next 12 months. He also credited the $7 billion IMF Extended Fund Facility (EFF) program and financial support from bilateral partners for playing a key role in stabilizing the economy.
According to the report, Pakistan has successfully met most of the IMF programme’s targets, enabling timely disbursement of funds.
S&P forecasts Pakistan’s economy to grow by 3.5 percent in fiscal 2027, saying continued structural reforms are expected to support robust economic activity. However, he warned that high energy prices as a result of ongoing tensions in the Middle East could put limited pressure on the economy.
The agency also warned that Pakistan’s credit rating could come under renewed pressure if the government fails to maintain fiscal discipline, external financing weakens, or debt servicing costs rise significantly again.
The post S&P downgrades Pakistan’s sovereign credit rating to ‘B’, outlook stable appeared first on Daily Pakistan English News.
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