- Fitch affirms Pakistan’s long-term devices at ‘B-‘.
- Company assigns ‘RR4’ restoration score and removes UCO.
- Debt trajectory and exterior liquidity pressures stay key dangers.
KARACHI: Fitch Rankings has affirmed Pakistan’s long-term devices at ‘B-‘, assigned an ‘RR4’ restoration score and eliminated the sovereign from Below Standards Commentary (UCO) after making use of revised sovereign score standards.
The company mentioned on Wednesday that the choice displays the applying of Fitch’s up to date Sovereign Ranking Standards, which got here into power in September 2025 and now incorporates specific restoration assumptions into sovereign debt rankings.
Fitch mentioned the senior unsecured long-term debt rankings of Pakistan and The Pakistan World Sukuk Programme Firm Restricted have been equalised with the nation’s long-term foreign-currency issuer default score (IDR).
The company cited expectations of common restoration prospects in a default situation, given Pakistan’s excessive degree of presidency debt and curiosity funds relative to income, and the absence of different elements that might warrant a notch above or beneath the IDR.
Fitch recalled it had upgraded Pakistan’s long-term foreign-currency IDR to ‘B-‘ with a secure outlook on April 15, 2025, from ‘CCC+’.
Fitch mentioned Pakistan has an ESG relevance rating of 5 for political stability and rights, in addition to for rule of regulation, institutional and regulatory high quality, and management of corruption, with Pakistan ranked on the twenty second percentile, in step with different sovereigns.
The company mentioned dangers to the score embody a failure to position authorities debt and debt-servicing indicators on a sustained downward trajectory, in addition to renewed stress on exterior liquidity, together with from delays in critiques underneath the Worldwide Financial Fund (IMF) programme or looser financial coverage settings.
Elements that might assist an improve embody a fabric discount in authorities debt and curiosity burdens, significantly by means of fiscal consolidation aligned with IMF commitments, alongside structural enhancements in tax income.
A sustained easing of exterior financing dangers, together with stronger entry to exterior funding and a sturdy rise in foreign-currency reserves past Fitch’s forecasts, may additionally assist optimistic score motion.
