Moody’s upgrades Pakistan rating to B3; Check where India stands?

Moody’s Ratings on Monday upgraded Pakistan’s sovereign credit rating to B3 from Caa1, while maintaining a stable outlook, citing improvements in governance, a stronger external position and improving fiscal metrics.Moody’s said Pakistan’s external vulnerability risks have eased since its last rating action in August 2025, with foreign exchange reserves building steadily amid sustained macroeconomic stabilisation. Lower domestic financing costs following monetary easing and an improved fiscal position have also strengthened the country’s debt affordability.Pakistan’s foreign exchange reserves rose to about $17 billion at the end of July 2026, from $14 billion a year earlier, enough to cover nearly three months of imports, according to Moody’s.The agency, however, said Pakistan’s credit profile remains vulnerable because of its structurally fragile external position, weak debt affordability, narrow revenue base and constraints on investment and high-productivity growth. These weaknesses remain reflected in its B3 rating.What is India’s rating by Moody’s?Moody’s has kept India’s sovereign credit rating at Baa3 with a stable outlook. The latest rating action available for India was in April 2026, when Moody’s retained the Baa3 rating and stable outlook while flagging risks from the Middle East conflict.Moody’s had previously affirmed India’s Baa3 rating in September 2025, citing sustained economic strength and reliable domestic funding for government deficits.Pakistan’s B3 rating is below India’s Baa3 investment-grade rating, reflecting the significant difference in the two countries’ sovereign credit profiles.

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