On August 24, 2026, Moody’s Global Ratings upgraded Pakistan’s sovereign credit rating to B3 from Caa1, while maintaining a stable outlook. Moody’s stated that the upgrade reflects improvements in governance and confidence that recent gains in Pakistan’s external and fiscal positions can be sustained.
According to the agency, rising foreign-exchange reserves and ongoing macroeconomic stabilization have reduced external vulnerability risks. At the same time, monetary easing and stronger fiscal performance have lowered domestic financing costs and improved debt affordability. Moody’s also cited Pakistan’s increased resilience to external shocks, including those stemming from the ongoing conflict in the Middle East.
Nonetheless, the rating remains constrained by Pakistan’s still fragile external position, weak debt affordability, narrow revenue base, and limited capacity to attract investment and enhance productivity. Separately, Standard & Poor’s currently rates Pakistan at B, with a stable outlook.
