Barclays upgrades Pakistan dollar bonds on stronger economic outlook
Barclays upgrades Pakistan dollar bonds to overweight, citing stronger reserves, fiscal gains and improving investor confidence
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
A branch of Barclays Bank is seen, in London, Britain.
Reuters
Barclays Bank Plc has upgraded Pakistan's sovereign dollar bonds to an "overweight" rating, reversing a downgrade issued in May.
The bank cited improving economic fundamentals, a stronger external position and a softer oil market outlook. Bloomberg reported the upgrade on Wednesday, citing a Barclays note.
Why did Barclays upgrade Pakistan's dollar bonds?
Barclays upgraded Pakistan's dollar bonds because the country's fiscal and external positions have strengthened significantly. The bank pointed to stable foreign exchange reserves, stronger external buffers and a moderate outlook for growth and inflation. This combination has lifted international investor confidence in Pakistan's macroeconomic trajectory.
Which Pakistan bonds did Barclays recommend buying?
Barclays recommended investors buy Pakistan's sovereign dollar bonds maturing in 2031, 2036 and 2051. The bank also favoured the 2031 bond issued by the Water and Power Development Authority. Alongside these recommendations, Barclays advised investors to sell five-year Pakistan credit default swaps.
What is supporting Pakistan's improving credit outlook?
Barclays said Pakistan's continued access to multilateral and bilateral financing remains intact, providing important support and reinforcing macroeconomic stability. The bank also pointed to Pakistan's geopolitical significance as a strategic link between the Middle East and Central Asia. This positioning continues to underpin support from international lenders and partners.
While sovereign credit rating upgrades have taken longer than expected, Barclays said it expects rating agencies to adopt a more favorable stance in the second half of 2026. This could open the door to positive rating actions if current economic trends hold.
How has Pakistan reduced investor risk concerns?
Barclays said fiscal consolidation, stable reserves and improved external financing conditions have helped reduce vulnerabilities that have historically weighed on investor sentiment. "Pakistan's resilience cannot be ignored," the bank said, citing recent economic progress that supports a stronger view of the country's credit outlook.
The upgrade comes as Pakistan seeks to maintain economic reforms and rebuild investor confidence after a period of financial strain. Policymakers are aiming to consolidate recent gains in macroeconomic stability and external account management.
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