Intel stock spikes after report of possible US government stake
Investing.com -- Moody’s Ratings has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa1 from Caa2, while changing the outlook to stable from positive.
The upgrade reflects Pakistan’s improving external position, supported by progress in reform implementation under the IMF Extended Fund Facility program. Foreign exchange reserves have increased to $14.3 billion as of July 25, 2025, equivalent to about ten weeks of imports, compared to $9.4 billion in August 2024.
Pakistan successfully completed the first review of its IMF program on schedule, securing a $1 billion disbursement in May 2025. The country also obtained a $1 billion commercial loan in June 2025, backed by a $500 million policy-based guarantee from the Asian Development Bank.
The rating agency noted that Pakistan’s fiscal position is strengthening from previously weak levels, with an expanding tax base. Government revenues rose to about 16% of GDP in fiscal year 2025 from 12.6% in fiscal year 2024, driven by increased tax revenues.
Despite improvements, debt affordability remains one of the weakest among rated sovereigns, with interest payments expected to absorb about 40-45% of revenue in fiscal years 2026-2027.
Moody’s expects Pakistan’s fiscal deficit to narrow further to 4.5-5% of GDP in fiscal year 2026, compared to 5.4% in fiscal year 2025.
The stable outlook reflects balanced risks. On the upside, debt service burden and external profile could improve more significantly than expected. On the downside, risks remain of delays in reform implementation required to secure timely official financing.
The rating agency also upgraded the backed foreign currency senior unsecured ratings for The Pakistan Global Sukuk Programme Co Ltd to Caa1 from Caa2, with a stable outlook.
Pakistan’s local and foreign currency country ceilings were raised to B2 and Caa1 from B3 and Caa2, respectively.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.