Moody’s Upgrade Pakistan to Highly Speculative B3 Rating
Moody’s said governance gains and stronger reserves helped ease Pakistan’s debt pressures, while weak revenue collection and external financing risks remain.
- On Monday, Moody upgraded Pakistan's credit rating to B3 from Caa1, reflecting expectations that governance improvements will sustain recent fiscal and external gains while maintaining a stable outlook for the Government.
- Pakistan's external vulnerability indicator improved to about 145% in 2026 from 230% in 2025, while foreign reserves climbed to $17 billion by July 2026, supporting the upgrade.
- Interest payments consumed about 35% of government revenue in fiscal 2026, down sharply from 49% in fiscal 2025, as lower domestic financing costs improved debt affordability materially.
- Despite gains, Moody cautioned that the nation's external position remains "fragile," noting that international surveys continue to point to weak rule of law and corruption.
- Pakistan requires about $21 billion in financing for FY2027 and around $30 billion for FY2028, with Moody stating continued IMF program adherence is essential to support reserves accumulation.
13 Articles
13 Articles
Moody’s Ratings upgraded Pakistan’s credit rating following the Mecca Agreement. Citing improved fiscal indicators, strong foreign policy, and falling domestic borrowing costs, the agency raised Pakistan’s rating by one notch, from Caa1 to B3. Türkiye, a founding member of the agreement, also saw its rating upgraded.
Moody's improves Pakistan's sovereign credit rating to B3 from Caa1
Pakistan's foreign-exchange reserves steadily increased: Moody's.Ratings agency says country's external vulnerabilities have eased. PM Shehbaz hails economic team for improving country's outlook.Moody's...
Moody’s lifts Pakistan sovereign rating on ‘macroeconomic
Global ratings agency Moody’s lifted Pakistan’s sovereign rating to ‘B3’ from ‘Caa1’ on Monday, citing improvements in governance and easing “external vulnerability risks.” The move comes just a month after peer S&P upgraded the nation on the back of “strong institutional stability” and effective implementation of reforms under an International Monetary Fund (IMF) program.
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