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Fitch upgrades Pakistan’s credit rating to ‘B-’ on improving deficits and reforms

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The photograph taken on May 27, 2025, shows the offices of Fitch Ratings building in London, Britain. (REUTERS/File)
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Updated 15 April 2025
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Fitch upgrades Pakistan’s credit rating to ‘B-’ on improving deficits and reforms

  • Upgrade reflects confidence that the country would implement structural reforms, says Fitch
  • Shehbaz Sharif says improved rating sign of world’s growing confidence in Pakistan’s economy
Updated 15 April 2025
Ismail Dilawar

KARACHI: Global ratings agency Fitch on Tuesday upgraded Pakistan’s foreign currency credit rating to ‘B-’ from ‘CCC+’ citing increased confidence in the country’s progress on narrowing its budget deficits, with Prime Minister Shehbaz Sharif hailing it as a sign of the world’s growing confidence in Pakistan’s economy. 

The upgrade reflects confidence that the country would implement structural reforms, supporting its International Monetary Fund (IMF) program performance and funding availability, Fitch said.

The agency said though ongoing global trade tensions could create external pressures on Pakistan, its low dependence on exports and market financing should mitigate risks.

“Prime Minister Shehbaz Sharif welcomes the improvement in Pakistan’s economic rating by global credit rating company Fitch,” a statement by the premier’s office said. 

“The improvement in the rating of Pakistan’s economy by international institutions is a manifestation of economic development and the confidence of the world community in Pakistan’s economy,” he added. 

Sharif said his government is working “tirelessly” to further improve Pakistan’s economy. 

Pakistan’s economy had been teetering on the brink of a sovereign default ever since inflation rose to a record high of 38 percent in May 2023 and reserves started declining rapidly. 

However, Pakistan’s economy was provided breathing space thanks in part to a $7 billion bailout program from the International Monetary Fund (IMF).

In March, the IMF reached a new deal with Pakistan which could unlock $1.3 billion in cash. 

Sharif’s government has vowed to implement the financial reforms, which include increasing the country’s tax base and privatizing loss-making entities to ensure sustainable growth.

Topics: fitch rating Pakistan economy

Pakistan extends airspace ban on Indian aircraft until June 24 amid ongoing tensions The restriction was originally imposed on April 24 after an attack in Kashmir killed 26 tourists The airspace closure impacted Indian airlines, particularly on long-haul

Updated 8 sec ago
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Pakistan extends airspace ban on Indian aircraft until June 24 amid ongoing tensions The restriction was originally imposed on April 24 after an attack in Kashmir killed 26 tourists The airspace closure impacted Indian airlines, particularly on long-haul

  • The restriction was originally imposed on April 24 after an attack in Kashmir killed 26 tourists
  • The airspace closure impacted Indian airlines, particularly on long-haul international routes
Updated 8 sec ago
NAIMAT KHAN

KARACHI: Pakistan has extended its ban on Indian aircraft using its airspace until June 24, the Pakistan Airports Authority (PAA) announced on Friday, amid continued bilateral tensions following recent military clashes this month.
The restriction was first imposed on April 24, only two days after an attack in Indian-administered Kashmir that killed 26 people. India blamed Pakistan for the attack despite Islamabad’s denials. The administration in New Delhi also downgraded bilateral diplomatic ties and took other steps like suspending visas for Pakistanis and shutting border crossings.
In response, Pakistan took its own measures, including the closure of its airspace to Indian aircraft, including commercial and military flights.
“The ban on Indian aircraft flying through Pakistani airspace has been extended until 4:59 AM on June 24, 2025,” the PAA said.
“All aircraft that are Indian-registered, operated, owned or leased will remain subject to the ban,” it added.
The airspace closure has significantly impacted Indian airlines, particularly on long-haul international routes.
Air India, which operates numerous flights to Europe and North America, has been forced to reroute flights, leading to increased fuel consumption, longer flight times, and additional operational costs.
The airline estimates that the ban could result in approximately $600 million in additional expenses over a year and has sought compensation from the Indian government.
Despite a ceasefire agreement announced on May 10, which has held according to Pakistani Deputy Prime Minister Ishaq Dar, the extension of the airspace ban indicates ongoing diplomatic strains.
The situation was further exacerbated by a recent school bus bombing in Pakistan that killed four children, an incident Islamabad has blamed on New Delhi. However, the Indian authorities have denied the charge.

Topics: airspace ban

Pakistan calls for Gaza aid access amid Israeli push for full control

Updated 11 min 46 sec ago
Hassan Ali Khan
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Pakistan calls for Gaza aid access amid Israeli push for full control

  • Israel’s war on Gaza has killed around 53,000 Palestinians and displaced two million
  • Pakistan says it opposes any attempts to displace Palestinians from their ancestral lands
Updated 11 min 46 sec ago
Hassan Ali Khan

ISLAMABAD: Pakistan’s foreign office on Friday called for the unimpeded delivery of humanitarian aid to millions of Palestinians after Israeli Prime Minister Benjamin Netanyahu announced his country’s plan to press ahead with its military campaign and take full control of the Gaza Strip.

Israel imposed a total blockade of the war-torn Palestinian territory in March, cutting off the entry of food, medicine, fuel and other essential supplies. The move triggered a deepening humanitarian crisis, with aid agencies warning of widespread malnutrition and a looming famine, particularly among children.

The blockade has drawn international condemnation, with the United Nations and human rights groups urging its immediate lifting on legal and humanitarian grounds. While Israel permitted limited aid deliveries this month, UN officials described the efforts as “a drop in the ocean” for Gaza’s 2.1 million residents.

“The expansion of Israeli ground operations in Gaza, as well as its announcement to take control of all of Gaza, poses a grave threat to efforts aimed toward achieving peace and stability in the region,” the foreign office spokesperson, Ambassador Shafqat Ali Khan, said during his weekly media briefing. “In addition, Israel also continues to deliberately obstruct critical humanitarian aid from reaching millions in dire need.”

“Pakistan reiterates its call on the international community for an immediate end to Israel’s genocidal campaign and to ensure a lasting ceasefire in Gaza,” he continued. “It also urges concrete steps toward provision of unimpeded humanitarian supplies to millions of Palestinians in dire need, as well as to hold Israel accountable for its egregious crimes.”

Khan condemned Israeli attacks on hospitals and other critical infrastructure during its military campaign.

He also maintained that Pakistan opposed any attempts to displace Palestinians from their ancestral lands, expand illegal Israeli settlements or annex any part of the occupied Palestinian territories.

The war in Gaza began in October 2023 and has so far killed about 53,000 Palestinians and displaced nearly all of Gaza’s two million residents.

Topics: War on Gaza Pakistan Palestine

Pakistan says initial probe confirms Indian involvement in school bus attack in Balochistan

Updated 40 min 33 sec ago
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Pakistan says initial probe confirms Indian involvement in school bus attack in Balochistan

  • Balochistan has been the site of an insurgency for decades, though it has intensified more recently
  • Islamabad says Indian ‘terror proxies’ have been tasked to accentuate their attacks in Balochistan
Updated 40 min 33 sec ago
Falak Mahmood Khan

ISLAMABAD: Pakistan said on Friday that its initial probe into an attack on a school bus in the Balochistan province has confirmed the involvement of “Indian terror proxies,” promising to defeat the “nefarious” designs.

Balochistan has been the site of an insurgency for decades, though it has intensified more recently, with groups like the Baloch Liberation Army (BLA) carrying out high-profile attacks on civilians and security forces.

On Wednesday, at least seven people, including six children, were killed when a vehicle-borne improvised explosive device targeted the school bus en route to an army-run school in Balochistan’s Khuzdar.

Speaking at a press conference alongside a Pakistani military spokesman, Interior Secretary Khurram Muhammad Agha called the Khuzdar bombing an attack on “our values, our education and on the very fabric of our society.”

“Initial findings confirm that this attack is in continuity of a broader pattern of violence sponsored by India through Fitna Al-Hindustan (FAH) operating under the tutelage and the patronage of the Indian intelligence agency R&AW,” he said, without offering any proof to link New Delhi to Wednesday’s assault.

The Indian administration has distanced itself from the Khuzdar school bus bombing, attributing such acts of violence to Pakistan’s “internal failures.”

The FAH comprises several separatist groups and independently operating cells who have been operating in the insurgency-hit southwestern Pakistani province, according to the Pakistani officials. These cells, after having suffered immense casualties in past few years, have now resorted to hitting “soft targets.”

“The terror proxies of Hindustan [India] have been tasked to accentuate their heinous attacks of terrorism in Balochistan and elsewhere, sabotage development in the region, incite fear among the population and derail the journey of peace and development in an attempt to repeat their playbook of 1971 [a reference to the fall of Dhaka],” he said.

During the presser, Pakistani military spokesman Lt. Gen. Ahmed Sharif Chaudhry detailed various incidents of violence that he said were carried out by India-backed groups.

“Very recently the media international media has seen self-given confessions and acknowledgements of multiple surrendered terrorists of this Fitna Al-Hindustan who told that how Hindustan is funding, planning and carrying out terrorist acts in Balochistan,” he noted.

Relations between Pakistan and India touched a new low last month, when gunmen killed 26 people in Indian-administered Kashmir in an attack India blamed on Pakistan. Islamabad denies complicity and Lt Gen Chaudhry said New Delhi had still not provided any evidence to back up its accusation.

A day earlier, Pakistan’s top diplomat at the United Nations (UN) said they would raise the school bus attack at the UN and present evidence of Indian involvement to the international community.

“This was a heinous terrorist act directed against children, against students, [which is] totally unacceptable and condemnable,” Ambassador Asim Iftikhar Ahmad told Arab News in an interview.

Interior Secretary Agha said Pakistan and its people, particularly those in Balochistan, reject such “nefarious designs” and Islamabad had the capacity and will to dismantle these networks and to bring the perpetrators and their handlers to justice.

“I assure you that the state in collaboration with the provincial governments and the state apparatus will defeat them,” he said.

“These Indian sponsored terrorists have no place in Pakistan. We have the wherewithal and the commitment to bring an end to this violence. Our resolved is firm and our response will be decisive.”

Pakistan and India have a history of bitter relations and frequently accuse each other of fomenting militancy in the other’s territory. Both countries have fought three wars, two of them over Kashmir.

Topics: School bus bombing Baloch Liberation Army

Pakistan to offer US firms concessions on mining investment in tariff talks, says minister

Updated 23 May 2025
Reuters
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Pakistan to offer US firms concessions on mining investment in tariff talks, says minister

  • Pakistan would put its offer of concessions for mining investment to US officials during talks over tariffs in the coming weeks
  • Pakistan’s Reko Diq gold mining project in Balochistan seeks up to $2 billion in financing, including up to $1 billion from US bank
Updated 23 May 2025
Reuters

ISLAMABAD: Pakistan plans to offer concessions to US companies to invest in its mining sector as part of negotiations with Washington over tariffs, its commerce minister told Reuters, as Islamabad seeks to capitalize on the Trump administration’s interest in boosting trade with South Asia.

Pakistan faces a potential 29 percent tariff on exports to the United States due to a $3 billion trade surplus with the world’s biggest economy, under tariffs announced by Washington last month on countries around the world. Tariffs were subsequently suspended for 90 days so negotiations could take place.

Pakistan’s Commerce Minister Jam Kamal said that Islamabad will offer US businesses opportunities to invest in mining projects primarily in Pakistan’s Balochistan province through joint ventures with local companies, providing concessions like lease grants.

The minister said that would be in addition to efforts to increase imports from the United States, particularly cotton and edible oils, which are currently in short supply in Pakistan.

Pakistan would put its offer of concessions for mining investment to US officials during talks over tariffs in the coming weeks.

Kamal did not give further information on the bidding process of these mines or other details.

“There is untapped potential for US companies in Pakistan, from mining machinery to hydrocarbon ventures,” he said in an interview with Reuters conducted on Thursday.

Pakistan’s Reko Diq copper and gold mining project in Balochistan seeks up to $2 billion in financing, including $500 million to $1 billion from the US Export-Import Bank, with term sheets expected by early in the third quarter of this year, its project director told Reuters last month.

The mine could generate $70 billion in free cash flow and $90 billion in operating cash flow over its lifespan.

US President Donald Trump has said that he’s working on “big deals” with both India and Pakistan, following Washington’s key role in brokering a ceasefire between Pakistan and India earlier this month following the worst fighting in decades between the nuclear-armed neighbors.

“The previous US administration focused more on India, but Pakistan is now being recognized as a serious trade partner,” Kamal said.

Pakistan will gradually lower tariffs in its upcoming federal budget, Kamal said.

He said that the United States has not specified trade barriers or priority sectors. The US Embassy in Islamabad did not immediately respond to a request for comment.

Topics: Pakistan US Ties US tariffs

Pakistan business confidence improves by 16 percentage points, survey reveals

Updated 23 May 2025
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Pakistan business confidence improves by 16 percentage points, survey reveals

  • The development comes over a week after the IMF approved a loan review for Pakistan, unlocking a $1 billion payment
  • Pakistan’s stocks, which rose more than 80 percent last year, have also largely resisted the pressures in recent weeks
Updated 23 May 2025
Ismail Dilawar

KARACHI: Business confidence has significantly improved among investors in Pakistan that is largely attributed to macroeconomic stability, declining inflation and anticipated improvements in business conditions over the next six months, a survey by Pakistan’s Overseas Investors Chamber of Commerce and Industry (OICCI) revealed on Thursday.

The Business Confidence Index (BCI) Survey – Wave 27, conducted across Pakistan in March-April 2025, shows the overall business confidence improved by 16 percentage points from negative 5 percent to positive 11 percent, compared to the previous Wave 26 survey in October-November 2024.

The Manufacturing sector led the recovery, improving from negative 3 percent to positive 15 percent, followed by the Retail/Wholesale sector, which rose from negative 18 percent to positive 2 percent in the latest survey. The Services sector maintained a steady outlook and jumped from 2 percent to 10 percent positive.

“The uptick in business confidence is a clear sign that our economic direction is on the right track. We are focused on creating a conducive environment for investment, supporting private sector growth, and ensuring long-term macroeconomic resilience,” Finance Minister Muhammad Aurangzeb was quoted as saying by the OICCI.

“The improved sentiment among businesses is both encouraging and a validation of our collective efforts.”

The development comes more than a week after the International Monetary Fund (IMF) approved a loan program review for Pakistan, unlocking a $1 billion payment which the State Bank of Pakistan said had been received. A fresh $1.4 billion loan was also approved under the IMF’s climate resilience fund.

Since averting a default in 2023, the South Asian country has been making rigorous efforts to boost its economy by offering various incentives to investors, particularly from abroad.

Pakistan’s stocks, which rose more than 80 percent last year, have largely resisted selling pressures in recent weeks, despite the country’s conflict with India that saw the two sides strike each other with missiles, drones and artillery.

Commenting on the survey’s findings, OICCI President Yousaf Hussain said the overall business confidence had shown a notable improvement across the business community over the past two years.

“This sharp recovery in the Business Confidence in the latest Wave 27 reflects the resilience of Pakistan’s business sector and its readiness to seize emerging growth opportunities,” he said.

“It is heartening to see positive momentum across key sectors, which reflects improved sentiment and growing trust in the country’s economic direction.”

Hussain said there must be greater policy consistency, transparency and active engagement with key stakeholders, including OICCI members, to maintain this growing positivity in the business confidence.

The BCI Wave 27 survey revealed increased optimism for the next six months, with 45 percent of the respondents expressing positive expectations.

“Key contributors to this positive outlook include economic growth, improved government policies, investment climate,” the survey report read.

“Despite the positive trend, 53 percent of the survey respondents reported a negative outlook on business conditions over the past six months, which is a substantial improvement from 66 percent negative sentiments in Wave 26. The key concerns indicated in the survey related to political stability, Rupee FX parity, Energy, and trade policies.”

The BCI of foreign investors, who OICCI members randomly selected for the survey, showed a remarkable increase from positive 6 percent to 17 percent, according to the findings.

This improvement is primarily attributed to better global business climate, an improved industry environment in Pakistan over the past six months, and expectations of increased capital investment in the coming six months.

“The latest BCI Wave 27 results were better than anticipated, with positive expectations reflected across all major sectors. Employment prospects, expansion plans, and investment expectations demonstrated notable gains, particularly in the Manufacturing and Retail sectors,” OICCI Secretary-General Abdul Aleem said.

“Despite notable improvement on the overall BCI, the new investment plans overall showed an improvement of 19 percent, but remained negative, which is an area of concern and needs to be addressed to further accelerate economic growth, energize large-scale manufacturing, trade and export.”

Topics: Pakistan Stock Exchange (PSX)

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