What happened
Fitch Ratings affirmed Pakistan’s long-term foreign-currency issuer default rating at “B-” with a “stable outlook” on 13 April 2026, citing progress on fiscal consolidation, macroeconomic stability measures, and continued alignment with the International Monetary Fund (IMF) programme. The agency added that foreign-exchange buffers rebuilt over the previous year provide a cushion against the economic impact of the ongoing Middle East war, and that Pakistan’s role as a ceasefire broker “may provide tangible benefits and partly offset external pressures.”
The action leaves Pakistan three notches below investment grade on the Fitch scale. The country has held the B- rating with a stable outlook since late 2025 after the agency upgraded from “CCC” earlier in the year. The decision was released the same day Foreign Minister Ishaq Dar wrapped up additional shuttle diplomacy around the post-Islamabad US-Iran talks, and ahead of Finance Minister Muhammad Aurangzeb’s arrival in Washington for the IMF and World Bank spring meetings.
Why it matters
Fitch’s rating drivers framed the IMF programme as the principal anchor: a March 2026 staff-level agreement with the fund unlocked a combined US$1.2 billion and is expected to help mobilise additional multilateral and bilateral support. The agency projected real GDP growth of 3.1 per cent for fiscal year 2026 ending 30 June, marginally above the 3.0 per cent recorded for FY25, supported by lower borrowing costs and rebounded confidence after the State Bank of Pakistan cut the policy rate to 10.5 per cent by the end of 2025, from a peak of 22 per cent in May 2024.
On the fiscal side, Fitch projected the primary surplus to narrow to 2.1 per cent of GDP in FY26, 0.3 percentage points below the official target, with general government debt-to-GDP easing to 68.9 per cent from 70.7 per cent in FY25 but still well above the ‘B’ median of 51.3 per cent. Inflation is expected to average 7.9 per cent in FY26, above FY25 but sharply below the 23.4 per cent recorded in FY24. Reserves, boosted by large net foreign-exchange purchases and a gold rally, were reported at just under US$28.4 billion in February 2026, with non-gold reserves up about US$5.1 billion year-on-year to US$17.5 billion.
What is still uncertain
The principal downside risk flagged by Fitch is exposure to the Middle East energy shock. Pakistan sources up to 90 per cent of its oil from the Gulf and has limited storage capacity, leaving it vulnerable to any constriction of supply through the Strait of Hormuz. The agency noted that fuel subsidies since early March had been funded by reallocating other budget expenditure, with pump-price rises and a move to more targeted support from April absorbing some of the cost. A sharp further drop in foreign-exchange reserves remains the key trigger for any future negative action. Fitch also signalled that renewed escalation along the Pakistan–Afghanistan border “presents a considerable risk to its commitment to fiscal consolidation” even though it is not in the agency’s baseline.
Sources & reporting notes
This article is a synthesis of published material, not original reporting. Sources were reviewed on 13 April 2026.
- Fitch Ratings — Fitch Affirms Pakistan at 'B-'; Outlook StablePublished 13 April 2026 · The institution's primary rating action, supporting every quoted forecast and driver.
- Dawn (Khaleeq Kiani) — Fitch affirms Pakistan's credit rating at 'B-'Published 13 April 2026 · Independent editorial reporting on the rating action, including Pakistan-specific context on IMF programme progress, fuel subsidies, and US-Iran ceasefire role.
