ISLAMABAD: S&P Global Ratings raised the Pakistan credit rating from “B-” to “B” on July 22, citing stronger institutions, fiscal consolidation and progress on economic reforms.
The agency maintained a stable outlook and affirmed Pakistan’s short-term sovereign rating at “B.” The upgrade returned the country to the “B” category for the first time since 2019.
S&P said improved institutional stability had enabled the federal government to implement critical reforms under Pakistan’s International Monetary Fund programme. Those measures strengthened foreign exchange reserves and reduced pressure on external credit indicators.
Efforts to expand the tax base improved revenue collection and accelerated fiscal consolidation, supporting a gradual decline in the government’s debt burden relative to gross domestic product, according to the rating agency.
The stable outlook reflects S&P’s expectation that Pakistan will maintain its reform programme, secure continued official financing and roll over commercial credit facilities during the next 12 months.
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S&P projected economic growth of 3.5% for fiscal year 2026–27 but warned that domestic security risks, regional tensions and any weakening of fiscal discipline could place renewed pressure on the rating.
Prime Minister Shehbaz Sharif welcomed the decision and said it reflected international confidence in Pakistan’s fiscal discipline, tax reforms and efforts to rebuild foreign exchange reserves.
