Pakistan's Credit Rating Upgraded: A Positive Turn for the Economy
Moody's upgraded Pakistan's credit rating from 'Caa2' to 'Caa1', citing an improved external financial position. The increase will aid Pakistan in raising external debt and reflects the country's progress under the IMF program. However, the country's debt affordability and governance remain weak.
Pakistan's credit rating has been upgraded by Moody's, moving from 'Caa2' to 'Caa1', signifying a stabilized external financial position. This decision bestows a 'stable' outlook on Pakistan, prompting Prime Minister Shehbaz Sharif to acknowledge it as a positive sign of effective economic policies.
This rating upgrade comes after similar actions from Fitch and S&P, enhancing Pakistan's ability to acquire external debt. Known for its recovery streak post an IMF bailout, Pakistan's international bonds experienced a significant uplift following Moody's announcement.
Despite improvements, Moody's highlighted Pakistan's continued issues with debt affordability and governance. The country's central bank had maintained a key interest rate at 11% amidst rising inflation, contrary to expectations of a rate cut following the credit rating upgrade.
(With inputs from agencies.)
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