Fitch maintains Pakistan’s long-term credit rating at ‘B-’ with negative outlook

ISLAMABAD: Global rating agency Fitch on Wednesday maintained Pakistan’s long-term credit rating at B- with a negative outlook, citing challenges in political stability, governance, and institutional standards.

In its latest report, Fitch also assigned a recovery rating for Pakistan, estimating that investors in the country’s securities could recover 31 to 50 per cent of their investments in the event of a default.

The report described Pakistan’s governance score as weak, pointing to low levels of political stability, rule of law, and institutional quality.

According to Fitch, Pakistan ranks at 22 per cent on the World Bank’s governance index, reflecting weak institutional capacity.

Fitch noted that high government debt and interest payments continue to exert pressure on the country’s credit rating. Without a reduction in borrowing costs or debt levels, future downgrades remain possible.

The agency said Pakistan’s economic outlook remains stable, but warned that delays in the International Monetary Fund (IMF) program or increased external financial pressures could have negative effects on the country’s credit profile.