The S&P Global Ratings, a credit rating agency, has hinted at upgrading Pakistan’s credit rating following the new political government that comes into power after February 8 general elections.
“Pakistan’s road to securing higher credit ratings will depend on whether the elections will bring about a government that can push for tough reforms,” the Bloomberg reported citing a S&P recent report.
A government with popular support and the ability to work with key institutions will have a better chance of securing financing from the IMF, S&P Analysts including Kim Eng Tan wrote in a February 4 report.
“Together with new policy moves to improve investor confidence and bring down inflation, this could lift fiscal and external metrics sufficiently for the sovereign ratings to move to the ‘B’ rating category,” S&P said.
Pakistan is currently rated ‘CCC+’ by the agency. The credit rating ‘B’ suggests the nation has the capacity to repay the foreign debt on time but still faces a degree of uncertainty that could lead to missing the repayment obligation later on.
To upgrade the rating, the global rating agency will closely watch the new government’s moves towards securing the next International Monetary Fund loan programme after the ongoing one, worth $3 billion, is completed in March 2024.
