Islamabad, 13 August 2025 — Prime Minister Muhammad Shehbaz Sharif expressed satisfaction with Moody’s decision to upgrade Pakistan’s credit rating from Caa2 to Caa1. The agency also revised Pakistan’s economic outlook from “positive” to “stable.”
International Recognition of Economic Progress
In a statement from the PM Office, the Prime Minister welcomed the credit rating upgrade and appreciated his economic team’s efforts in achieving this milestone. He stated that this upgraded rating reflects the progress of Pakistan’s economic policies. The government remains committed to further enhancing the country’s credit rating.
Such positive international assessments strengthen investor confidence and support economic growth. A stable outlook signifies consistent improvement in Pakistan’s financial stability.
Boost to Foreign Investment and Reduced Borrowing Costs
The upgrade to Caa1 signals improved creditworthiness for Pakistan, indicating reduced default risk in international financial markets. This enhancement is expected to attract foreign investment and lower borrowing costs for the government globally.
Lower borrowing costs enable Pakistan to access international capital more affordably, supporting infrastructure development and facilitating economic expansion.
Understanding Moody’s Credit Rating System
Moody’s credit ratings assess the debt obligations and performance of issuers. The ratings evaluate:
- Government debt obligations
- Corporate financial instruments
- Financial institutions across global markets
These ratings help investors assess credit risk and make informed investment decisions. The Caa1 rating places Pakistan in the speculative grade category, showing improved prospects compared to the previous Caa2 designation.
