Fitch Ratings has upgraded Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘CCC+’ to ‘B-’, and has given it a Stable Outlook. This means that Fitch now has more confidence in Pakistan’s ability to manage its finances and meet its debt obligations.
The upgrade reflects Pakistan’s recent efforts to improve its economy by reducing its budget deficit and making important long-term changes, known as structural reforms. These steps are part of the commitments Pakistan has made under the International Monetary Fund (IMF) programme. Fitch believes that these actions are helping the country stabilize its economy and maintain access to international financial support.
Pakistan has also been following strict economic policies, which include measures to control inflation and reduce unnecessary spending. These policies are expected to help the country rebuild its foreign exchange reserves, which are important for paying for imports and managing foreign debt. Additionally, they are meant to make it easier for Pakistan to handle its external financing needs—basically, the money it needs from outside sources to keep the economy running smoothly.
However, even with this positive outlook, there are still challenges ahead. Pakistan faces large funding needs, and successfully carrying out all the necessary reforms may be difficult. Still, the upgrade by Fitch is a sign that progress is being recognized and that international confidence in Pakistan’s economic direction is improving.
