S&P Global maintains ‘CCC+’ credit rating for Pakistan

WEB DESK: S&P Global confirmed Pakistan’s long-term sovereign credit rating at “CCC+” on Tuesday, attributing this decision to the country’s reliance on external aid to manage its debt obligations amid an ongoing economic crisis.

Although the risk of near-term default has diminished, the ratings agency noted that substantial foreign fund inflows and moderate current account deficits will be essential to rebuild Pakistan’s external reserves.

S&P Global highlighted that persistent inflationary pressures and subdued economic activity are hindering efforts to address the government’s substantial fiscal deficit.

The agency also cautioned that a challenging political environment could further impede economic growth, emphasising the need for political stability to enhance Pakistan’s creditworthiness. Despite these concerns, S&P affirmed the country’s stable outlook.

In a related development, Fitch Ratings upgraded Pakistan’s long-term foreign-currency issuer default rating to ‘CCC+’ on Monday, citing improved external funding prospects under the new IMF agreement.