S&P Global Praises Pakistan’s Macroeconomic Turnaround

S&P Global Ratings praises Pakistan’s macroeconomic gains, noting fiscal discipline, lower debt growth and reforms; Finance Minister Aurangzeb says progress under FY2026-27 budget is “firmly on track.”

A delegation from S&P Global Ratings formally acknowledged Pakistan’s progress in strengthening macroeconomic stability during talks with Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Thursday. The visit, led by YeeFarn Phua and Giulia Filocca of S&P’s sovereign team, focused on Pakistan’s sovereign credit profile, macroeconomic outlook and reform measures.

Aurangzeb highlighted the “significant improvement in Pakistan’s macroeconomic fundamentals,” pointing to stronger growth, lower inflation and higher foreign exchange reserves that he said underpin renewed investor confidence. He credited the pro-growth, fiscally disciplined Federal Budget FY2026-27 and disciplined policy implementation for recent gains.

The finance minister underlined an improving public debt profile, noting a sustained decline in the debt to GDP ratio and the slowest pace of central government debt growth in about 15 years. He cited active liability management, debt buybacks and an extended maturity profile for domestic liabilities as steps reinforcing debt sustainability and fiscal credibility.

S&P’s delegation appreciated the government’s commitment to fiscal discipline, debt sustainability and external resilience, according to the Finance Ministry statement. The ratings team also reviewed Pakistan’s structural reform agenda, which targets taxation, energy sector fixes, state owned enterprise reform, privatisation and public financial management.

“The implementation of the Government’s reform agenda…remains firmly on track,” Aurangzeb told the delegation, referring to benchmarks under the IMF supported Extended Fund Facility and Resilience and Sustainability Facility. He added that successful programme reviews and timely reform actions have kept Pakistan engaged with multilateral partners such as the IMF, World Bank and Asian Development Bank.

Officials said the meeting also explored Pakistan’s medium term economic outlook and measures to further strengthen the sovereign credit profile. The government has formally signalled plans to tap international bond markets seeking upgrades that would support a targeted $2 billion issuance in the current fiscal year, a move contingent on continued policy traction and external resilience.

Analysts say S&P’s positive acknowledgment could support Pakistan’s push for a higher rating and wider access to international capital, but they caution that durable outcomes will depend on sustained revenue mobilisation, expenditure control and timely execution of reforms. The delegation’s constructive engagement suggests global rating agencies are closely watching Pakistan’s next policy milestones.