S&P Upgrades Pakistan Credit Rating to ‘B Minus’: Global credit rating agency Standard & Poor’s (S&P) Global has upgraded Pakistan’s long-term credit rating from Triple C to B Minus, signaling growing international confidence in the country’s economic recovery.
The upgrade reflects a “stable outlook”, according to S&P, supported by signs of fiscal consolidation, improved foreign exchange reserves, and reduced inflation. This change comes as Pakistan implements broad financial reforms under Prime Minister Shehbaz Sharif’s economic revival agenda.
“The stable outlook reflects our expectation that ongoing economic recovery and government efforts to increase revenue will stabilize fiscal and debt indicators,” S&P noted in its official report.
Key Highlights from the S&P Report:
- Forex Reserves surged to $20.5 billion, providing a cushion against external shocks.
- Inflation declined sharply to 4.5%, a positive sign for consumer purchasing power.
- Policy interest rate was slashed to 11% by the State Bank of Pakistan (SBP), indicating monetary easing.
- Remittance inflows exceeded $38 billion, boosting Pakistan’s balance of payments.
- Fiscal deficit narrowed to 5.6%, indicating better budgetary discipline.
- GDP Growth Projections: 2.7% this fiscal year, rising to 3.6% in the next.
The SBP’s aggressive monetary easing — a 1100 basis point cut from its peak — has aimed to support industrial activity and investment. While the agriculture sector remains under stress, industrial output has improved modestly, contributing to the positive outlook.
S&P also cited the $7 billion IMF program, approved in October 2024, as a critical milestone in restoring macroeconomic stability. The reforms attached to the IMF deal have helped stabilize the rupee, control inflation, and strengthen fiscal management.
PM Shehbaz Sharif’s Response:
Prime Minister Shehbaz Sharif welcomed the rating upgrade, saying it validates the government’s tough but necessary economic reforms. He vowed to continue policies that promote growth, control inflation, and improve revenue collection.
“This upgrade is a vote of confidence in Pakistan’s future. We are committed to steering the economy toward long-term stability and inclusive growth,” PM Sharif stated.
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Looking Ahead:
While the upgrade is a major morale boost, S&P cautioned that further progress depends on continued political stability, structural reforms, and sustained revenue growth. External challenges such as global oil prices, geopolitical tensions, and debt repayments remain areas of concern.
