Moody’s upgrades Pakistan’s Credit Rating sovereign rating to Caa1 with a stable outlook, highlighting improvements in the external position and IMF-backed reforms—boosting fiscal stability amid persistent governance challenges.
Moody’s Investors Service has raised Pakistan’s Credit Rating Climbs to Caa1: Moody’s Signals Stability sovereign credit rating by one notch, moving from Caa2 to Caa1, and adjusted the outlook from “positive” to “stable”, attributing the upgrade to a stronger external position.ARY NEWSDunya NewsProfit by Pakistan Today
The agency cited Islamabad’s economic management, particularly progress under the IMF’s Extended Fund Facility (EFF), as a key driver behind the credit boost.Dunya NewsBusiness Recorder Moody’s also emphasized that while foreign exchange reserves are on an upward trajectory, Pakistan continues to rely on timely support from international partners.Dunya NewsBusiness Recorder
Despite these gains, Moody’s noted ongoing fiscal vulnerabilities, albeit improving due to a broader tax base and increasing revenues. However, debt affordability remains among the lowest compared to other rated sovereigns.Business RecorderDunya News
The updated outlook suggests a balanced set of risks: on the upside, faster-than-expected improvements in debt service and external stability; on the downside, potential delays in reforms could jeopardize access to official financing and strain external buffers.Dunya NewsBusiness Recorder
This upgrade mirrors similar moves by S&P Global and Fitch Ratings, reflecting growing confidence in Pakistan’s economic direction.Dunya NewsAInvest
| Aspect | Details |
|---|
| Rating Change | Upgraded from Caa2 to Caa1 |
| Outlook Revised To | Stable, from previously positive |
| Key Positives | Better external position; IMF-supported reforms; rising tax revenue |
| Ongoing Risks | Weak governance; political uncertainty; reliance on external financing |
| Comparable Moves | Upgrades by S&P and Fitch reinforce positive sentiment |
