Moody’s Ratings has elevated Pakistan’s credit rating from Caa2 to Caa1, maintaining a stable outlook due to the country’s stronger financial position backed by an IMF loan. This follows similar upgrades by S&P and Fitch in recent months, driven by Prime Minister Shehbaz Sharif’s government sticking to fiscal reforms.
The agency highlighted Pakistan’s progress under the IMF program, leading to better foreign reserves and a broadening tax base. However, Moody’s cautioned that Pakistan still faces risks like political instability and dependence on external funding. The stable outlook reflects balanced risks—while further reforms could boost growth, delays might weaken the economy again. The upgrade also applies to Pakistan’s Global Sukuk Programme, reinforcing cautious optimism about the country’s economic recovery.