{"id":31396,"date":"2026-04-14T07:21:36","date_gmt":"2026-04-14T07:21:36","guid":{"rendered":"https:\/\/gsrra.com\/?p=31396"},"modified":"2026-04-14T07:21:40","modified_gmt":"2026-04-14T07:21:40","slug":"fitch-affirms-pakistans-b-rating-with-stable-outlook-flags-energy-exposure-as-key-risk","status":"publish","type":"post","link":"https:\/\/gsrra.com\/?p=31396","title":{"rendered":"Fitch affirms Pakistan\u2019s \u2018B-\u2019 rating with stable outlook, flags energy exposure as key risk"},"content":{"rendered":"\n

Agency sees 3.1% growth and 7.9% inflation in FY26 as IMF support and fiscal reforms sustain stability despite rising external repayments<\/em><\/strong><\/p>\n\n\n\n

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The global credit rating agency Fitch Ratings has affirmed Pakistan\u2019s long-term Foreign-Currency Issuer Default Rating (IDR) at \u2018B-\u2019 with a stable outlook, citing ongoing fiscal consolidation and macroeconomic stabilization under the country\u2019s programme with the International Monetary Fund (IMF).<\/p>\n\n\n\n

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In a statement issued on Monday, the agency said Pakistan\u2019s policy framework remains closely tied to the IMF programme, which continues to serve as a critical anchor for fiscal discipline and external financing. Authorities reached a staff-level agreement in March 2026 on the third review of the Extended Credit Facility (ECF) and the second review of the Resilience and Sustainability Facility, potentially unlocking $1.2 billion subject to approval by the IMF board.<\/p>\n\n\n\n

Fitch projected that economic growth would edge up to 3.1% in FY26, compared with 3.0% in FY25, supported by improved business confidence following a sharp decline in borrowing costs. The State Bank of Pakistan (SBP) had reduced the policy rate to 10.5% by the end of 2025, down from 22.0% in May 2024, although short-term interbank rates moved higher in early April amid inflation concerns linked to constrained energy supplies.<\/p>\n\n\n\n

The agency expects inflation to average 7.9% in FY26, exceeding the previous year\u2019s level but remaining significantly below the 23.4% recorded in FY24, as higher global energy prices and changes to targeted subsidy mechanisms feed into consumer prices.<\/p>\n\n\n\n

On the fiscal front, Fitch estimated that the primary surplus would narrow to 2.1% of GDP in FY26, slightly below the official target, reflecting rising non-interest expenditures and structural constraints in tax collection. Despite this, the overall fiscal deficit is projected to remain broadly stable at around 5.3% of GDP.<\/p>\n\n\n\n

External financing pressures are expected to intensify during the fiscal year. The rating agency projected that external debt repayments would increase to $12.8 billion, or 2.9% of GDP, in FY26, compared with nearly $8 billion in FY25. Pakistan repaid a $3.5 billion deposit to the United Arab Emirates in April, while an additional $9.2 billion in bilateral deposits and loans is expected to be rolled over.<\/p>\n\n\n\n

Fitch forecasts that Pakistan\u2019s foreign exchange reserves will decline modestly to $21.3 billion by the end of FY26, covering about 2.9 months of external payments, down from $22.6 billion at the end of FY25, with net reserves remaining negative due to existing liabilities, including commercial bank deposits and bilateral financing arrangements.<\/p>\n\n\n\n

The agency cautioned that Pakistan remains highly exposed to global energy market volatility. It noted that the country imports up to 90% of its oil from Gulf producers and has limited storage capacity, leaving it vulnerable to supply disruptions, particularly along the Strait of Hormuz, a critical route for regional energy shipments.<\/p>\n\n\n\n

Fitch also observed that government fuel subsidies introduced since early March were financed through expenditure reallocation and offset partly by higher pump prices and a shift to more targeted support from April. The agency expects the overall fiscal impact of these measures to remain contained as authorities adjust spending elsewhere in the budget.<\/p>\n\n\n\n

Separately, the report noted that Pakistan\u2019s foreign exchange buffers have strengthened over the past year, providing some protection against regional geopolitical shocks. It added that the country\u2019s diplomatic role as a ceasefire broker could yield tangible benefits that may help ease external pressures.<\/p>\n\n\n\n

Fitch further said that tensions between Pakistan and Afghanistan have intensified since February 2026, but the potential economic fallout is expected to remain limited unless the situation escalates further, which could otherwise threaten fiscal consolidation efforts.<\/p>\n\n\n\n

Reference Link:- https:\/\/profit.pakistantoday.com.pk\/2026\/04\/13\/fitch-affirms-pakistans-b-rating-with-stable-outlook-flags-energy-exposure-as-key-risk\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Agency sees 3.1% growth and 7.9% inflation in FY26 as IMF support and fiscal reforms sustain stability despite rising external repayments The global credit rating agency Fitch Ratings has affirmed Pakistan\u2019s long-term Foreign-Currency Issuer Default Rating (IDR) at \u2018B-\u2019 with a stable outlook, citing ongoing fiscal consolidation and macroeconomic stabilization under the country\u2019s programme with […]<\/p>\n","protected":false},"author":1,"featured_media":31397,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"aside","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[2108,16263,36,28691,28689,28690,28687,28688],"class_list":["post-31396","post","type-post","status-publish","format-aside","has-post-thumbnail","hentry","category-sample-category","tag-fitch","tag-fitch-ratings","tag-pakistan","tag-economic-indicators-positive","tag-flags-energy","tag-key-risk","tag-pakistans-rating-b","tag-stable-out-look","post_format-post-format-aside"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/31396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31396"}],"version-history":[{"count":1,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/31396\/revisions"}],"predecessor-version":[{"id":31398,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/31396\/revisions\/31398"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/media\/31397"}],"wp:attachment":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}