Moody’s has upgraded Pakistan’s credit rating from ‘Caa2’ to ‘Caa1’ and assigned it a ‘stable’ outlook.
The decision is seen as significant in the context of the country’s improving financial condition and the implementation of reforms.
According to Moody’s, the upgrade is driven by an improvement in Pakistan’s external financial position and the successful completion of reforms under the IMF’s Extended Fund Facility (EFF) program.
The report noted that Pakistan’s foreign exchange reserves are expected to increase, although the country still relies on timely financial assistance.
Similarly, the government’s fiscal position is strengthening, but its debt repayment capacity remains weak.
Moody’s also highlighted ongoing political uncertainty and weak governance as factors that could negatively affect the credit profile.
However, the stable outlook reflects a balance in the current financial situation, with the potential for further improvement in the credit profile if reform momentum accelerates.
The rating upgrade reflects Pakistan’s financial stability and improving relations with international financial institutions, marking a positive sign for the country’s economy.
