S&P considers upgrading Pakistan’s credit rating

WEB DESK: In a significant development, S&P Global Ratings, a renowned credit rating agency, has suggested the potential upgrading of Pakistan’s credit rating following the outcomes of the February 8 general elections, signalling optimism for the nation’s economic future.

The credit rating agency highlighted in a recent report that the trajectory of Pakistan’s credit ratings hinges on the formation of a government capable of spearheading robust reforms.

According to a report by Bloomberg citing S&P, a government enjoying widespread public support and collaboration with key institutions stands a higher chance of securing financing from the International Monetary Fund (IMF), as outlined in a report by S&P analysts, including Kim Eng Tan, released on February 4.

S&P emphasised that, coupled with innovative policy initiatives aimed at bolstering investor confidence and curbing inflation, such measures could lead to improvements in fiscal and external metrics substantial enough to elevate sovereign ratings to the coveted ‘B’ rating category.

Presently, Pakistan holds a ‘CCC+’ rating by the agency, indicating the nation’s capacity to meet foreign debt repayment obligations on time but still facing a degree of uncertainty.

The global rating agency is closely monitoring the new government’s efforts to secure the next IMF loan programme, following the completion of the ongoing $3 billion programme scheduled to end in March 2024.

The forthcoming nine-month programme conclusion aligns with the new government’s announcement of its economic roadmap.

It is noteworthy that major rating agencies have downgraded Pakistan’s ratings owing to prolonged political and economic crises.

The general elections are poised to be a crucial determinant in shaping the nation’s economic trajectory, with over 128 million male and female voters expected to participate in the electoral process.