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Moody’s upgraded Pakistan’s credit rating to Caa1 from Caa2 with a stable outlook after IMF loan approval. S&P and Fitch also upgraded ratings after fiscal reforms.
Moody’s Pakistan Credit Rating: Upgrade comes after PM Shehbaz Sharif’s govt vows fiscal discipline, IMF reforms. (IMAGE: REUTERS)
Moody’s Ratings on Wednesday Pakistan’s credit rating after Islamabad managed to improve its financial position following a loan approval from the International Monetary Fund, financial news agency Bloomberg News said in a report.
Moody’s upgraded Pakistan to Caa1 from Caa2 with a stable outlook, it said in a statement.
Earlier S&P Global Ratings and Fitch Ratings made similar moves after Prime Minister Shehbaz Sharif’s government made several pledges
The upgrade comes on the heels of similar ratings actions by S&P Global Ratings and Fitch Ratings over the past four months, following repeated assurances from Prime Minister Shehbaz Sharif’s government to maintain fiscal discipline and implement a series of IMF-mandated reforms, the Bloomberg News report said.
Also in July, Finance Minister Muhammad Aurangzeb urged Moody’s to improve Pakistan’s credit rating to facilitate its return to international capital markets on better terms. Pakistan has not issued international bonds since July 2021, citing difficult macroeconomic conditions and a weakened rating, and has instead leaned on time deposits from allied nations to meet external debt obligations and maintain liquidity, according to a Dawn report.
In a note issued in May, Moody’s Ratings warned that a sustained escalation in tensions with India could dent Pakistan’s growth, disrupt its fiscal consolidation plans and undermine overall macroeconomic stability. The agency said it did not expect a similar impact on India.
Moody’s at the time pointed out that Pakistan had only recently been pulled back from the brink of bankruptcy through another International Monetary Fund bailout, contingent on strict conditions. The country’s earlier credit rating Caa2+ (considered speculative grade) at the time reflected weak fundamentals.
Pakistan was engaged in a conflict with India after it blocked a counter-terror operations where terrorists it protected were targeted by the Indian army after the terrorists attacked and killed 26 civilians in Pahalgam with state support from Islamabad. Pakistan urged truce after India took out close to a dozen airbases and military bases.
Shankhyaneel Sarkar is a senior subeditor at News18. He covers international affairs, where he focuses on breaking news to in-depth analyses. He has over five years of experience during which he has covered sev…Read More
Shankhyaneel Sarkar is a senior subeditor at News18. He covers international affairs, where he focuses on breaking news to in-depth analyses. He has over five years of experience during which he has covered sev… Read More
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