Fitch Affirms Pakistan’s Long-Term Foreign Currency Issuer Default Rating at B- with a Stable Outlook

Pakistan’s Long-Term Foreign Currency Issuer Default Rating (IDR) has been affirmed at B- by Fitch Ratings (Fitch), with a Stable Outlook.

The affirmation is based on Pakistan’s constrained public finances and dismal economic growth, indicated by large fiscal deficits and a high government debt to gross domestic product (GDP) ratio, which have been further exacerbated by the COVID-19 pandemic.

However, Fitch notes that Pakistan’s external finances appear resilient to the COVID-19 shock due to policy actions taken over the past few years by authorities including tighter monetary policy settings and greater exchange rate flexibility, in addition to ongoing multilate...