Pakistan is considered a higher risk country in the region in terms of ability to meet its financial commitments, both domestic and international, and is rated as not being viable for investment. Pakistan has been rated by Standard & Poor's (S&P) as B- (negative).
An official on condition of anonymity clarified that BBB rating is considered attractive for investment and BB rating is acceptable whether negative or plus, however, countries listed below BB are not considered viable for investment. Investors closely watch S&P's ratings, which are considered an unbiased assessment of macroeconomic indicators as well as future forecasts of sovereign countries.
Factors like political stability, economic indictors including budget deficit and current account deficit and how the deficits are financed by the government of the time are some critical criteria used to rate a sovereign country. Rated as B negative, Pakistan was considered weaker relative to other regional countries in terms of meeting domestic and foreign debt obligations.
Sri Lanka rated as BB negative and B+ (plus) in domestic and foreign rating respectively, which implies that Sri Lanka is not high risk country in terms of domestic rating and is relatively better than Pakistan with B+ (plus) on foreign rating whereas Bangladesh with BB- (negative) is considered acceptable. According to sovereign rating list, India has a BBB rating on both domestic and foreign debt and is considered relatively protected and attractive for foreign investors. S&P rates 126 countries and Bhutan, Nepal and Madives are not rated.
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