Islamabad (TDI): Pakistan is stepping up efforts to improve its credit standing, with Finance Minister Muhammad Aurangzeb urging Moody’s to acknowledge the country’s recent economic turnaround.
The request came during a virtual session with the US-based rating agency on Tuesday, where Aurangzeb led a team of senior economic officials.
Moody’s had last upgraded Pakistan’s rating in 2024, moving it from Caa3 to Caa2 while also shifting the outlook to “positive.” That revision came after Pakistan resumed its deal with the International Monetary Fund (IMF), helping ease pressure on its economy.
The finance minister reportedly pointed to some major developments, such as the successful completion of the IMF’s final review under the Stand-By Arrangement, as well as progress under the Resilience and Sustainability Facility (RSF).
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He also outlined a number of domestic reforms, including tighter fiscal discipline in the federal budget, liberalized trade policies to support exports, and reduced public sector spending. Talks with the United States over trade preferences were also said to be progressing.
The meeting also touched on Pakistan’s return to international capital markets. The delegation mentioned that the country had recently secured $1 billion from the Middle East, and is preparing to issue its first Panda bond in Chinese markets. There are also plans to explore the Eurobond route, depending on how ratings evolve.
Economic indicators were also shared with Moody’s. A current account surplus, stronger remittances, and rising exports were presented as signs of resilience.
Read More: Moody’s Upgrades Pakistan’s Ratings to Caa2
Tax reform was another central theme. The minister explained how the government is trying to widen the tax net using technology and tighter enforcement.
He added that the Rs2 trillion in additional revenue this year was achieved through homegrown measures, not under external pressure. The government is aiming to lift the tax-to-GDP ratio to around 13–13.5% in the next few years.
Farkhund Yousafzai is an Associate Editor at The Diplomatic Insight.
