S&P Global lifts Pakistan's credit rating 'B-' from 'CCC+', outlook stable
Business
Moody’s had upgraded Pakistan’s credit rating by one notch in August 2024 to Caa2 from Caa3
The improvement in credit rating will enhance the confidence of foreign investors in the Pakistani economy
Last week, FinMin urged the leading US rating agency — Moody's — to improve Pakistan's credit rating
Global ratings agency Fitch had upgraded Pakistan's foreign currency credit rating to 'B-' from 'CCC+' in April
(Reuters) – Ratings agency S&P Global raised Pakistan’s sovereign credit rating to ‘B-’ from ‘CCC+’ and placed it on a ‘stable’ outlook on Thursday, saying the country’s finances and reserves had been stabilised by International Monetary Fund (IMF) support.
“The stable outlook reflects our expectations that continued economic recovery and government efforts to enhance revenue will stabilise fiscal and debt metrics,” S&P said in a statement on the move.
“We also expect that sustained official financing will support Pakistan in meeting its external obligations, and that the country will continue to roll over its commercial credit lines over the next 12 months.”
Pakistan’s longer-dated international bonds rallied after the upgrade, with the 2051 maturity gaining 1.6 cents to be bid at 84.85 cents on the dollar, according to Tradeweb data.
The 2031 and 2036 maturities also gained around 1 cent, while shorter-dated maturities posted smaller gains.
PM SATISFIED WITH CREDIT RATING
APP adds: Prime Minister Muhammad Shehbaz Sharif has expressed satisfaction over the improvement in Pakistan’s credit rating by S&P Global Ratings.
In a statement, he said rise of Pakistan’s credit rating proved that Pakistan’s economy was moving rapidly towards stability.
The improvement in Pakistan’s credit rating will not only help in accessing the international capital market but will also reduce the pressure of paying external debts, he noted.
“Pakistan’s macroeconomic indicators are improving,” he said adding, “The improvement in credit rating will enhance the confidence of foreign investors in the Pakistani economy.”
He said international financial institutions and rating agencies were also acknowledging the successful economic policies of the government.
“The efforts of the government’s economic team are commendable”, he added.
Read More: Finance minister showcases Pakistan's economic reforms, secures global support
Last week, Finance Minister Muhammad Aurangzeb urged the leading US rating agency — Moody’s — to improve Pakistan’s credit rating and help its return to international capital markets at favourable conditions.
Moody’s had upgraded Pakistan’s credit rating by one notch in August 2024 to Caa2 from Caa3 (downgraded in February 2023 due to suspension of the IMF programme) and changed its outlook to positive from stable for improving macroeconomic conditions, including liquidity and external position from very weak levels.
Global ratings agency Fitch had upgraded Pakistan’s foreign currency credit rating to ‘B-’ from ‘CCC+’ in April, citing increased confidence in the country’s progress on narrowing its budget deficits.
