The history of Pakistan’s rating by all three international agencies — Standard and Poor’s (S&P), Moody’s and Fitch — is disturbing as the country was never rated higher than B (with Moody’s equivalent rating B1) defined as highly speculative indicative of material default risk with a limited margin of safety (financial commitments being met however capacity for continued payment vulnerable to deterioration in the business and economic environment).

And the limited margin of safety has invariably been linked to Pakistan being on an International Monetary Fund programme (IMF).

Within the speculative category, below investment grade, the best rating for the three agencies is as follows: Moody’s Baa1, Baa2 and Baa3, S&P’s BB , BB and BB- and Fitch identical to S&P rating – a category that Pakistan has yet to be allocated.

The next category down is speculative grade very high risk with Moody’s rating at B1, B2 and B3 with S&P equivalent of B , B and B- and Fitch identical to S&P. Fitch upgraded Pakistan to B- on 15 April 2025 (positive) – though this upgrade has not been followed by the other two........

© Business Recorder