ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s reform-driven recovery has gained international recognition following successful IMF reviews and rating upgrades by global agencies Fitch, S&P, and Moody’s. These improvements highlight renewed confidence in the country’s economic management and reform agenda.
IMF reviews and reform progress
According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), the completion of IMF reviews under both the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) reflects strong policy performance and commitment to structural reforms.
The report said Pakistan’s sovereign risk has declined sharply, with the credit default swap (CDS) probability dropping by 2,200 basis points over the past 15 months. The improvement results from prudent fiscal management, external stability, and disciplined monetary policy that have anchored investor confidence.
Rating agencies and sustainable finance
Fitch Ratings awarded Pakistan’s Sustainable Financing Framework an “Excellent” alignment score, confirming full compliance with international environmental, social, and governance (ESG) standards for green and social bonds. The Finance Division said this recognition positions Pakistan to attract more sustainable finance inflows.
At the same time, S&P and Moody’s also upgraded their outlooks for Pakistan’s economy, citing consistent reform efforts and improving debt sustainability. Together, these developments have strengthened the country’s image in global financial markets.
Improved macroeconomic indicators
The report highlighted several positive economic trends. The rupee has stabilized against the dollar, foreign exchange reserves have risen to 19.9 billion dollars, and inflation remains within the 5–6 percent range despite the lingering effects of flood-related disruptions.
The Finance Division said that the successful IMF review reaffirmed international confidence in Pakistan’s reform direction and macroeconomic discipline. It also provides a foundation for future program discussions aimed at sustaining fiscal and financial stability.
Impact on investment and borrowing costs
Economists said that IMF endorsement and ratings upgrades reduce Pakistan’s borrowing costs and improve access to international capital markets. They noted that stronger credibility helps ease debt rollovers and creates a safer environment for foreign direct investment.
The Finance Division added that the IMF’s assessment acknowledged progress in expanding the tax base, improving expenditure management, and enhancing monetary coordination. These measures have already contributed to a fiscal surplus of Rs1.5 trillion in July–August FY2026, compared to a deficit in the same period last year.
Focus on long-term growth
Officials said that the next phase of reform will target export diversification, competitiveness, and growth in renewable energy and digital sectors. They emphasized that the government is committed to transforming macroeconomic stability into sustainable, inclusive growth.
The Finance Division concluded that maintaining consistent policies remains crucial for consolidating recent achievements. It said that the IMF’s positive review and the global rating upgrades are clear signs of Pakistan’s reform momentum and resilience amid global economic uncertainty.