Financial institution Barclays has upgraded Pakistan’s sovereign debt to an ‘overweight’ position following a positive outlook on the oil market, as reported in a Bloomberg analysis. This move comes after lowering the rating just prior.
The upgrade reflects Barclays’ belief that Pakistan’s external financial situation remains resilient and is bolstered by improvements in fiscal conditions, steady foreign reserves, and support from multilateral and bilateral financing sources. Despite these factors, analysts at Barclays predict continued stability for Pakistan’s economy with a moderate growth-inflation scenario anticipated.
Barclays also recommended specific bond investments including the 2031, 2036, and 2051 dollar sovereign bonds, along with the 2031 Wapda (Water and Power Development Authority) bond. The financial advice is part of a broader recommendation to buy these securities and sell Pakistan credit default swaps.
While ratings upgrades have taken time to materialize, Barclays believes agencies may review and conclude positively on ratings by mid-2026. Fitch Ratings confirmed this perspective with their own affirmation of Pakistan’s long-term foreign currency IDR at ‘B-’ with a stable outlook in April.
Source: Original report
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