S&P Global lifts Pakistan’s credit rating ‘B-‘ from ‘CCC+’, outlook stable

LONDON: S&P Global raised Pakistan’s sovereign credit rating to ‘B-‘ from ‘CCC+’ and placed it on a ‘stable’ outlook on Thursday, saying the country’s finances and reserves had been stabilised by International Monetary Fund support.

“The stable outlook reflects our expectations that continued economic recovery and government efforts to enhance revenue will stabilize fiscal and debt metrics,” ratings agency S&P said in a statement on the move.

“We also expect that sustained official financing will support Pakistan in meeting its external obligations, and that the country will continue to roll over its commercial credit lines over the next 12 months.”

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Pakistan’s longer-dated international bonds rallied after the upgrade, with the 2051 maturity gaining 1.6 cents to be bid at 84.85 cents on the dollar, according to Tradeweb data.

The 2031 and 2036 maturities also gained around 1 cents, while shorted-dated maturities posted smaller gains.

PM expresses satisfaction

Prime Minister Muhammad Shehbaz Sharif has expressed satisfaction over the improvement in Pakistan’s credit rating by S&P Global Ratings.

In a statement, he said rise of Pakistan’s credit rating from CCC+ to B- proved that Pakistan’s economy was moving rapidly towards stability.

The improvement in Pakistan’s credit rating will not only help in accessing the international capital market but will also reduce the pressure of paying external debts, he noted.

“Pakistan’s macroeconomic indicators are improving,” he said adding, “The improvement in credit rating will enhance the confidence of foreign investors in the Pakistani economy.”

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He said international financial institutions and rating agencies were also acknowledging the successful economic policies of the government.

“The efforts of the government’s economic team are commendable”, he added.