ISLAMABAD: Global credit rating agency Moody’s has revised Pakistan’s banking sector outlook from positive to stable, indicating that overall performance of banks is expected to remain steady over the next 12 to 18 months.
Moody’s noted that Pakistan’s economic conditions are gradually improving, and despite a slow pace of recovery, banks are likely to maintain stable operations in the near term.
The agency highlighted that high interest rates and ongoing credit risk pressures continue to pose challenges for the sector. Government financial constraints were identified as a significant risk factor affecting banking operations.
According to Moody’s, Pakistan’s GDP growth is projected at 3.5 percent in 2026, although concerns regarding external financing and inflation persist.
The rating agency cautioned that any risks in effective policy implementation could impact the outlook for the banking sector.
Meanwhile, Prime Minister Muhammad Shehbaz Sharif expressed satisfaction over Moody’s decision to assign a “Stable” outlook to Pakistan’s banking sector, praising the efforts of the country’s economic team.
The prime minister stated that Pakistan’s economy is on a path of stable growth and development. He emphasized that international reports and ratings serve as a clear testament to the accuracy and direction of the country’s economic policies.
He further lauded the economic team for their tireless work in ensuring Pakistan’s financial stability and growth, calling their efforts commendable.
“By the grace of Allah, the vision of Pakistan’s progress is steadily becoming a reality,” the prime minister added.
