Global ratings agency Fitch upgraded Pakistan’s foreign currency credit rating to ‘B-’ from ‘CCC+’, citing increased confidence in the country’s progress on narrowing its budget deficits.
The upgrade also reflects confidence that the country would implement structural reforms, supporting its International Monetary Fund (IMF) programme performance and funding availability, Fitch said.The agency said though ongoing global trade tensions could create external pressure, its low dependence on exports and market financing should mitigate risks.
Prime Minister Shehbaz Sharif welcomed the upgrade, calling it a reflection of economic progress and the world community’s confidence in the national economy, the Associated Press of Pakistan reported.He said the upgradation of Pakistan’s credit rating was highly encouraging.
“Fitch has declared Pakistan’s economy as stable. The improvement of economic rating by international institutions reflects economic progress and the global community’s confidence in the country’s economy,” he remarked.PM Shehbaz said that the incumbent government was working tirelessly to bring further improvement to the national economy.
Welcoming the upgrade by the agency, Finance Minister Muhammad Aurangzeb said that it was a “strong expression of confidence in the country’s economic reforms and policies”.He said that the agency’s step will further strengthen the government’s economic agenda.
After this announcement, the finance minister said, more investment, trade, increased employment opportunities, industrial development and additional resources will be available to the country.“The government will continue the journey of economic reforms and economic stability,” he said, adding that the economy will further improve and stabilise in the future.
In a post on X, Adviser to the Finance Minister KhurramSchehzad said that the outlook was stable, adding that the agency’s decision was a strong endorsement of the government’s economic policies and outcomes.
The economy had been teetering on the brink of default ever since inflation rose to a record high in May 2023 and reserves started shrinking but has seen some respite thanks in part to a $7 billion bailout programme from the IMF.
In March, the IMF reached a new deal with Pakistan, which could unlock $1.3bn in cash.According to the update on Fitch’s website, Pakistan performed well on quantitative performance criteria, particularly on reserve accumulation and the primary surplus, although tax revenue growth fell short of its indicative target.
