Moody’s Upgrades Pakistan’s Credit Rating to Caa2

Islamabad: Global rating agency Moody’s has upgraded Pakistan’s credit rating by one notch, raising it from ‘Caa1’ to ‘Caa2’ and maintaining a ‘Stable’ outlook. This decision is being seen as a recognition of improvements in the country’s financial situation and the successful implementation of reforms. According to Moody’s, the rating upgrade was made possible due to an improvement in Pakistan’s external financial position and the successful completion of reforms under the IMF’s Extended Fund Facility (EFF) program. The report also noted that foreign exchange reserves are expected to increase, although the country still relies on timely financial support. The government’s fiscal position is strengthening, but its debt repayment capacity remains limited. Moody’s warned that political uncertainty and weak government performance could negatively affect the country’s credit profile. The stable outlook indicates that the current financial situation is balanced, and accelerating reforms could further enhance Pakistan’s credit profile. This upgrade reflects improvements in Pakistan’s financial stability and its relations with international financial institutions, signaling a positive development for the country’s economy.