S&P Global Ratings upgrades Pakistan's sovereign credit rating to 'B'

S&P Global Ratings has upgraded Pakistan's long-term sovereign credit rating to 'B' from 'B-', signaling improved economic conditions and assigning a stable outlook. The upgrade reflects the agency's assessment of Pakistan's strengthened institutional capacity, which has enabled the implementation of critical reforms under the International Monetary Fund (IMF) program.

The credit rating agency highlighted that these reforms have accelerated fiscal consolidation and replenished the country's external buffers. S&P specifically pointed to the passage of the IMF's $7 billion Extended Fund Facility (EFF) program in September 2024 as a pivotal moment in restoring macroeconomic stability and rebuilding foreign reserves.

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Our upgrade on Pakistan is predicated on improved institutional stability that has helped to implement critical IMF programme reforms. These reforms have quickened fiscal consolidation and rebuilt external buffers.

Pakistan has reportedly met most of the EFF program targets to date, facilitating timely disbursements from the IMF. S&P noted that a relatively stable political environment has been instrumental in achieving these milestones. The agency also affirmed Pakistan's short-term sovereign credit rating at 'B' and raised its transfer and convertibility assessment to 'B' from 'B-'.

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critical in restoring macroeconomic stability to the country and replenishing foreign reserves.