Fitch keeps Pakistan at B- rating, notes economic progress

The agency noted that the ongoing IMF continues to play a crucial role.

KARACHI: Credit rating agency Fitch Ratings has affirmed Pakistan’s long-term sovereign credit rating at B-, maintaining a stable outlook, while acknowledging improvements in financial discipline and economic stability.

The agency noted that the ongoing International Monetary Fund program continues to play a crucial role in supporting Pakistan’s economic reform agenda. It added that a $1.2 billion tranche is expected following approval by the IMF Executive Board.

According to the report, foreign exchange reserves are providing a buffer against external shocks, strengthening the country’s short-term financial position.

However, Fitch cautioned that Pakistan remains exposed to risks arising from energy market volatility in the Middle East.

The report projects inflation in fiscal year 2026 to rise to 7.9%, while the policy interest rate is expected to decline to 10.5%, potentially improving business confidence. Economic growth is forecast at 3.1% for FY2026.

Fitch also estimates external debt repayments to reach $12.8 billion, while the fiscal deficit is expected to remain close to 5.3% of GDP.
Additionally, the current account balance is projected to return to a deficit of around 1.1% of GDP.