Barclays has upgraded Pakistan’s sovereign dollar bonds to “overweight” after improving its market outlook. The British lender cited stronger economic stability and better oil market prospects. Consequently, investor confidence in Pakistan’s financial outlook has strengthened.
Barclays Cites Strong External Position
According to Bloomberg, Barclays upgraded Pakistan’s dollar bonds only one month after downgrading them. Analysts said the country’s external position has remained stronger than expected.
The report highlighted improving fiscal performance, stable foreign exchange reserves and stronger external buffers. Additionally, moderate economic growth and controlled inflation have supported investor confidence.
Barclays also noted continued financial support from multilateral and bilateral partners. Furthermore, analysts said Pakistan’s strategic location between Central Asia and the Middle East could provide long-term economic benefits.
The bank recommended investors buy Pakistan’s sovereign dollar bonds maturing in 2031, 2036 and 2051. It also recommended purchasing Wapda’s dollar bond maturing in 2031.
Positive Outlook Backed by Credit Agencies
Barclays said global credit rating agencies could review Pakistan’s sovereign rating during the second half of 2026. Moreover, analysts expect those reviews could result in positive outcomes.
Finance Minister’s adviser Khurram Shahzad welcomed the upgrade as an encouraging development. He said international investors and financial markets increasingly recognise improvements in Pakistan’s key economic indicators.
Earlier this year, Fitch Ratings affirmed Pakistan’s sovereign rating at “B” with a stable outlook. The agency cited stronger fiscal discipline and improving macroeconomic stability.
Fitch also credited ongoing reforms under the International Monetary Fund programme for supporting economic recovery. However, it stressed that continued implementation of IMF-backed reforms remains essential for sustaining long-term stability.
