ISLAMABAD – Global credit rating agency Moody’s has upgraded Pakistan’s long-term foreign and local currency ratings from Caa2 to Caa1, citing improvements in the country’s external position and progress under the International Monetary Fund’s Extended Fund Facility programme. The agency also revised its outlook from positive to stable, reflecting increased confidence in Pakistan’s economic management.
According to Moody’s, the upgrade is supported by stronger foreign exchange reserves, better balance of payments, and ongoing economic reforms aimed at stabilising macroeconomic indicators. The agency highlighted that while external vulnerabilities remain, timely financing from international partners and prudent fiscal management have contributed to improved investor confidence.
Despite the positive assessment, Moody’s emphasised that challenges such as weak governance, political uncertainty, and fiscal constraints continue to pose risks to Pakistan’s credit profile. The agency noted that the country remains vulnerable to external shocks, but the current measures provide a degree of resilience.
Prime Minister Shehbaz Sharif welcomed the rating upgrade, commending the efforts of his economic team and reaffirming the government’s commitment to strengthening economic stability. Adviser to the Finance Minister, Khurram Schehzad, said the move reflects Pakistan’s clear trajectory towards macroeconomic resilience, noting that all three major global rating agencies have now upgraded the country with a stable outlook.
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