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
The Prime Minister, in a statement from the PM Office, welcomed the credit rating upgrade and appreciated his economic team’s efforts in reaching this milestone. He emphasized that this upgraded rating reflects the progress of Pakistan’s economic policies. The government is committed to further enhancing the country’s credit rating.
Such positive international assessments boost investor confidence and support economic growth. A stable outlook indicates consistent improvement in Pakistan’s financial stability.
Boost to Foreign Investment and Reduced Borrowing Costs
The upgrade to Caa1 highlights improved creditworthiness for Pakistan, signaling reduced default risk in international financial markets. This improvement is expected to attract foreign investment and lower the government’s borrowing costs 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 assist investors in assessing credit risk and making informed investment decisions. The Caa1 rating positions Pakistan in the speculative grade category, demonstrating improved prospects compared to the previous Caa2 designation.
