Global credit rating agency Fitch announced an upgrade to Pakistan’s foreign currency credit rating, raising it from ‘CCC+’ to ‘B-‘. This decision reflects a growing optimism regarding the country’s efforts to reduce its budget deficits.
The rating boost also indicates confidence in Pakistan’s commitment to implementing essential structural reforms, which are crucial for maintaining performance in line with its International Monetary Fund (IMF) program and ensuring the availability of funding, according to Fitch.
While persistent global trade tensions may pose external challenges for Pakistan, the agency pointed out that the country’s minimal dependence on exports and market financing would help alleviate potential risks.
Pakistan’s economy has been under significant strain, nearing default since inflation surged to unprecedented levels in May 2023, coinciding with dwindling reserves. However, the situation has improved somewhat due to a $7 billion bailout agreement with the IMF.
In March, a new accord with the IMF was reached, which has the potential to release $1.3 billion in financial assistance.