Pakistan could achieve a B+ sovereign credit rating by the first quarter of fiscal year 2027-28, or between July and September 2027, Finance Minister Muhammad Aurangzeb said, as the government points to improvements in macroeconomic stability, foreign exchange reserves and external-sector indicators. Speaking to the media at the Overseas Investors Chamber of Commerce and Industry (OICCI), Aurangzeb said continued progress on structural reforms and economic stability could help the country move upward in international credit assessments. He also cautioned that it remains too early to determine whether Pakistan’s current $7 billion Extended Fund Facility (EFF) arrangement with the International Monetary Fund (IMF) will be its final programme.
Pakistan currently holds a B sovereign rating with a stable outlook from S&P Global Ratings, which maintained the rating in July 2026. Moody’s also upgraded Pakistan’s sovereign rating from Caa1 to B3 with a stable outlook in August. Aurangzeb said the government is now working toward entering the BB rating category, reflecting its broader objective of improving Pakistan’s standing in international credit markets. He linked the recent improvement in ratings to stronger external-sector indicators, including record remittance inflows and an increase in the country’s foreign exchange reserves.
The finance minister highlighted the rise in reserves held by the State Bank of Pakistan (SBP) as an important development for Pakistan’s external position. According to Aurangzeb, SBP foreign exchange reserves reached a record $21.4 billion in September 2026. The increase has raised Pakistan’s import cover to approximately three months, bringing the country closer to the internationally recognised benchmark. Stronger reserves can provide greater capacity to meet external payment obligations and manage foreign exchange requirements, while also contributing to the broader assessment of a country’s external stability by international credit rating agencies.
Aurangzeb said sustained macroeconomic stability, improvements in sovereign credit ratings and the recent privatisation of Pakistan International Airlines (PIA) could help strengthen investor confidence. He said these developments could encourage both domestic and international investors to increase foreign direct investment in Pakistan. The government’s focus on improving economic indicators and reducing financial vulnerabilities is therefore being presented as part of a wider effort to create conditions that are more supportive of investment and reduce concerns surrounding the country’s external financing requirements.
On Pakistan’s relationship with the IMF, Aurangzeb said it was premature to conclude whether the current $7 billion EFF programme would be the country’s final arrangement with the Fund. He said the immediate priority should be to gradually reduce Pakistan’s dependence on external financing while continuing to manage short-term debt rollovers and balance-of-payments requirements. The government still faces external financing obligations, meaning that reducing reliance on multilateral support would require continued improvements in reserves, exports, remittances, investment and overall external-sector stability.
The finance minister also pointed to Pakistan’s successful $3 billion Eurobond issuance as an important development in the country’s access to international capital markets. He said transactions of this nature could help Pakistan progressively reduce its dependence on foreign assistance and IMF support. Access to international bond markets provides another potential source of external financing, although borrowing conditions remain linked to investor confidence, sovereign credit assessments and developments in global financial markets.
Despite international oil prices recently moving above $100 per barrel amid continuing geopolitical tensions in the Middle East, Aurangzeb expressed confidence that Pakistan’s current account deficit would remain within the government’s original FY27 target of zero to 1.0 per cent of GDP. Higher oil prices can increase Pakistan’s import bill and place pressure on the external account, making the current account outlook an important part of the government’s economic assessment. Maintaining the deficit within the targeted range would depend on developments in energy prices, export performance, remittance inflows and overall import demand during the fiscal year.
Aurangzeb also projected Pakistan’s economy to grow by 4.0 per cent in FY27, compared with 3.7 per cent growth recorded in FY26. The projected increase forms part of the government’s broader economic outlook as it seeks to maintain macroeconomic stability while improving external-sector indicators and attracting investment. The expected movement toward a higher sovereign rating will depend on how Pakistan performs across these areas, including fiscal management, reserves, debt obligations, economic growth and structural reforms. If the improvement in these indicators continues through FY27, the government expects Pakistan could move toward a B+ rating by the first quarter of FY28.
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