Moody’s Upgrades Pakistan’s Economic Outlook to Positive
Moody’s Ratings has upgraded Pakistan’s economic outlook from stable to positive, citing improvements in the country’s macroeconomic conditions and liquidity. The agency announced on Wednesday that it had improved Pakistan’s creditworthiness by raising its rating for both local and foreign currency obligations, as well as for senior unsecured debt, from Caa3 to Caa2, indicating a slight reduction in perceived credit risk. A higher rating suggests that Pakistan is seen as somewhat more capable of meeting its debt obligations than before, though it still remains in the high-risk category.
The upgrade reflects Pakistan’s better-than-expected macroeconomic stability and slightly improved government liquidity and external positions, which had previously been at fragile levels. Moody’s had downgraded Pakistan’s rating in February last year due to economic instability.
This holiday season, give to:
Truth and understanding
The Media Line's intrepid correspondents are in Israel, Gaza, Lebanon, Syria and Pakistan providing first-person reporting.
They all said they cover it.
We see it.
We report with just one agenda: the truth.
A key factor in the improved outlook is the greater certainty surrounding Pakistan’s external financing, especially following the staff-level agreement with the International Monetary Fund (IMF) for a 37-month Extended Fund Facility totaling $7 billion. The rating agency expects the IMF Board to approve this agreement in the coming weeks.
While Pakistan’s foreign exchange reserves have nearly doubled since June 2023, Moody’s notes that the reserves are still insufficient to fully meet the country’s external financing requirements. Pakistan remains dependent on timely financial assistance from official partners to meet its external debt obligations.