Fitch Upgraded Pakistan’s Credit Rating to ‘B-’ Amid Progress on Fiscal Reforms

Fitch Upgraded Pakistan’s Credit Rating to ‘B-’ Amid Progress on Fiscal Reforms

Pakistan: Global credit rating agency Fitch upgraded Pakistan’s foreign currency credit rating from ‘CCC+’ to ‘B-’, citing increased confidence in the country’s efforts to narrow budget deficits and implement structural reforms aligned with its International Monetary Fund (IMF) program. The upgrade was seen as a reflection of international confidence in Pakistan’s economic direction. Fitch noted that while global trade tensions could pose external risks, Pakistan’s limited reliance on exports and market financing should help cushion potential impacts. 

The rating improvement came after Pakistan’s economy had faced severe challenges, including a record inflation rate of 38 percent in May 2023 and rapidly declining foreign reserves. A USD 7 billion IMF bailout program had provided critical support, followed by a new agreement in March that could unlock an additional USD 1.3 billion. The government committed to continuing financial reforms, focusing on expanding the tax base and privatizing loss-making entities to promote long-term economic stability. 

Source: Arab News