International rating agency Fitch has released a report on Pakistan’s economic situation, maintaining the country’s long-term credit rating at B with a negative outlook.
Fitch had upgraded Pakistan’s rating from Triple C Positive to B Negative on April 15, 2025. Alongside the credit rating, the agency also assigned a recovery rating for Pakistan, indicating that investors in securities could expect to recover between 31 to 50 percent of their investments in the event of default.
The report noted that Pakistan’s economic outlook remains stable. In case of a default, an average level of recovery on government debts is expected due to high government borrowing and interest payments.
However, the agency highlighted structural challenges, citing weak scores for political stability, rule of law, and governance standards in Pakistan. According to the World Bank Governance Index, Pakistan ranks at the 22 percent level.
Fitch emphasized that any failure to reduce government debt and interest obligations would negatively affect the country’s rating. Delays in the IMF program or an increase in external financial pressures were also cited as risk factors.
The report stated that implementing fiscal reforms and increasing tax revenues in line with IMF conditions could help improve Pakistan’s rating.
Similarly, a clear reduction in external financial risks and a sustained increase in foreign exchange reserves would have positive effects on the credit profile.
