Pakistan downgraded by S&P as fiscal, economic outlook worsens

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Pakistan was downgraded by S&P Global Ratings as a series of shocks — from flooding to surging inflation — caused the nation’s external, fiscal and economic metrics to further deteriorate.

The nation’s credit score was cut by a notch to CCC+ from B- by S&P, which expects Pakistan’s dwindling foreign reserves to remain under pressure in the coming year, just as political risks linger, according to a Thursday statement.

“Pakistan’s already low foreign exchange reserves will remain under pressure throughout 2023, barring a material decline in oil prices or a step-up in foreign assistance,” S&P analysts Andrew Wood and YeeFarn Phua wrote.