S&P Global on Tuesday upgraded Pakistan’s long-term sovereign credit rating to ‘B’ from ‘B-‘, marking the country’s return to the higher rating for the first time since 2019.
The agency also raised Pakistan’s transfer and convertibility assessment to ‘B’ from ‘B-‘.
According to S&P Global, the upgrade reflects stronger institutional capacity, continued implementation of IMF-backed economic reforms, improved fiscal performance and a significant increase in the country’s foreign exchange reserves.
In a statement, the ratings agency said Pakistan had strengthened its institutional framework through the implementation of key reforms, helping rebuild foreign exchange reserves and ease pressure on its external financing position.
S&P also credited the government’s efforts to broaden the tax base and improve revenue collection, saying these measures had accelerated fiscal consolidation and contributed to a gradual decline in the country’s net general government debt-to-GDP ratio.
“We therefore raised our long-term sovereign rating on Pakistan to ‘B’. At the same time, we affirmed the ‘B’ short-term rating,” the agency said.
S&P assigned a stable outlook, reflecting its expectation that stronger institutional settings will support continued economic reforms, steady growth and ongoing fiscal consolidation.
The agency added that sustained financing from official lenders would help Pakistan meet its external obligations and continue rolling over commercial credit lines during the coming year.