๐ต๐ฐ ๐๐๐ค๐ข๐ฌ๐ญ๐๐ง ๐๐ฉ๐ ๐ซ๐๐๐๐ ๐ญ๐จ โ๐-โ ๐๐ฌ ๐๐ง๐๐ฅ๐๐ญ๐ข๐จ๐ง ๐๐๐ฌ๐๐ฌ & ๐๐๐ญ๐ ๐๐ฎ๐ญ๐ฌ ๐๐จ๐จ๐ฆ
Pakistanโs foreign-currency credit rating has been upgraded by S&P Global Ratings from โCCC+โ to โB-โ with a stable outlook. This move shows confidence in the governmentโs fiscal reforms and improving economy. After the news, Pakistanโs dollar bonds rose, according Bloomberg.
S&P said Pakistanโs efforts to raise revenue, plus softer inflation, are helping reduce budget pressures. The new rating now puts Pakistan next to countries like Nigeria and Egypt on S&Pโs list.
๐ Rate cuts likely as inflation cools
Bloomberg Economics forecasts GDP growth at 4.1% in FYโฏ2026. The State Bank of Pakistan has already cut its policy rate from 22% to 11%, and analysts expect another 50โ100 basisโpoint cut by year-end. A Topline Securities survey shows most experts predicting a cut at the next meeting on Julyโฏ30.
Lower oil prices and easing inflation (down to 3.2% in June) support further rate cuts. Shankar Talreja from Topline sees average inflation at 5โ7% in FYโฏ2026, which could allow the rate to drop to around 10% by Decemberโฏ2025.
๐ Growth target & IMF support
The government targets 4.2% GDP growth this year, backed by a $7โฏbillion IMF deal. The current account also turned positive, recording a $328 million surplus. Falling inflation helped the central bank cut rates sharply from last yearโs highs.
Shahid AliโฏHabib (ArifโฏHabib Ltd.) notes that lower rates could reduce borrowing costs, boost business, and speed up recovery after FYโฏ2025โs modest 2.68% growth.
โ Market view
Talreja warns markets may not react strongly since treasury bills already price in these cuts, trading around 10.7%. But the upgrade still reflects stronger fundamentals and policy reforms.
With inflation easing, reforms ongoing, and rates falling, Pakistan could see growth and more investor confidence ahead.