Pakistan's economic turnaround earns S&P Global vote of confidence

July 03, 2026 (MLN): S&P Global Ratings acknowledged Pakistan's progress in strengthening macroeconomic stability and appreciated the government's commitment to fiscal discipline, debt sustainability, external resilience, and structural reforms.

The acknowledgement came during a meeting between a delegation from S&P Global Ratings and Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, held to discuss Pakistan's sovereign credit profile, macroeconomic outlook, and progress under the government's economic reform agenda.

The delegation comprised Mr. YeeFarn Phua, Director, Sovereign Ratings, and Ms. Giulia Filocca, Associate Director, Sovereign Ratings, according to a press release issued.

During the meeting, the Finance Minister highlighted significant improvement in Pakistan's macroeconomic fundamentals, citing stronger economic growth, sustained fiscal consolidation, improved debt sustainability, and enhanced external sector resilience underpinned by the Federal Budget FY2026-27.

He noted that prudent economic management, disciplined policy implementation, and continued structural reforms have strengthened macroeconomic stability, resulting in lower inflation, higher foreign exchange reserves, a stronger external position, and renewed investor confidence, alongside continued progress across key fiscal and external indicators despite a challenging regional and global environment.

He also highlighted Pakistan's improving public debt profile, pointing to a sustained decline in the debt-to-GDP ratio, the slowest pace of central government debt growth in around 15 years, active debt management through liability management operations and debt buybacks, an extension in the maturity profile of domestic debt, historically lower fiscal deficits, and record primary surpluses.

Furthermore, it was stated that these improvements, supported by stronger revenue mobilization and prudent expenditure management, were reinforcing fiscal sustainability and strengthening Pakistan's sovereign credit fundamentals.

The delegation was briefed on the government's structural reform agenda focused on taxation, energy, state-owned enterprises, privatization, governance, and public financial management to support sustainable, private sector-led and export-oriented growth.

The Finance Minister said implementation of the reform agenda, including reforms supported under the IMF's Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF), remained firmly on track, with successful programme reviews and timely implementation of key reform benchmarks.

He also highlighted Pakistan's continued engagement with the IMF, World Bank, Asian Development Bank, and other development partners in advancing the country's long-term reform agenda.

The delegation also held discussions with the Finance Minister and his team on Pakistan's medium-term economic outlook, reform priorities, and measures aimed at further strengthening the country's sovereign credit profile.

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