Pakistan’s central bank said on Thursday recent credit rating upgrades underscored the country’s improving macroeconomic outlook, as Governor Jameel Ahmad used an Independence Day address to stress economic resilience and reforms.
The remarks came a day after Moody’s Investors Service upgraded Pakistan’s sovereign rating, citing stronger foreign exchange reserves, a current account surplus and fiscal consolidation. Analysts said the move could ease access to global capital markets and attract investment as Pakistan looks to consolidate gains under its $7 billion IMF program approved in September 2024.
“International credit rating agencies have upgraded Pakistan’s ratings in recognition of recent measures which will help unlock foreign investment opportunities,” Ahmad said at the State Bank of Pakistan’s (SBP) flag-hoisting ceremony in Karachi.
Ahmad noted the dramatic improvement in inflation, which had soared to 38 percent in May 2023 before easing to 11.8 percent by May 2024 and reaching a record low of 3.2 percent in June 2025.
“Our monetary policy remains geared toward maintaining the hard-earned gains in price stability, while ensuring inflation remains within 5-7 percent,” he said, adding that this would help “unlock broader economic and business opportunities.” The SBP has reduced its policy rate in seven steps from 22 percent to 11 percent since June 2024 in line with the improved outlook.
External accounts have also strengthened, with reserves nearly tripling to $14.5 billion by the end of FY25 from $4.4 billion two years earlier. Ahmad said the turnaround was achieved through a $2.1 billion current account surplus – the first in 14 years – and record remittances of $38.3 billion from overseas Pakistanis, without adding to external debt.
The governor also highlighted SBP’s digital push, including spinning off the Raast instant payment system into a separate subsidiary, easing account opening procedures and modernizing payment infrastructure to widen financial inclusion. He said such steps would particularly benefit women and small businesses.
Pakistan’s economic rebound follows two years of crisis, when the country averted default through IMF disbursements, painful reforms, and strict fiscal consolidation. The IMF has urged Pakistan to maintain exchange rate flexibility, broaden its tax base and strengthen the energy sector to lock in recent stability.
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