S&P Global Ratings Upgrades Pakistan Credit Rating to B

S&P Global Ratings upgraded the long-term sovereign credit rating of Pakistan from B- to B with a stable outlook, the first such upgrade in nine years. The agency attributed the move to improved macroeconomic stability, strengthened institutional capacity, and a declining ratio of total government debt relative to GDP.

These developments followed the implementation of economic reforms under a $7 billion International Monetary Fund Extended Fund Facility. These efforts resulted in increased revenue collection, improved fiscal discipline, and a significant rise in foreign exchange reserves, which grew to $25.3 billion by June 2026 from a low of $6.7 billion. The government also returned to international capital markets in April 2026 through Panda bond and Eurobond issuances.

Prime Minister Shehbaz Sharif welcomed the decision, describing it as a milestone for the national economy. While S&P projects 3.5% GDP growth for fiscal year 2027, the agency warned that high interest burdens and geopolitical tensions with India and Afghanistan remain risks. A failure to maintain current fiscal discipline could lead to a future downgrade.