Barclays Bank Plc has upgraded Pakistan’s sovereign dollar bonds to an “overweight” rating, reversing the downgrade it issued in May as improving oil market conditions and the country’s stronger external position boost investor confidence.

In a research note released on Wednesday, analysts led by Avanti Save said Pakistan’s resilience has become increasingly difficult to overlook, with recent economic indicators supporting a more constructive outlook.

The bank said Pakistan’s macroeconomic position has continued to strengthen, citing fiscal improvement, stable foreign exchange reserves, stronger external buffers, and a balanced outlook for growth and inflation.

Barclays also pointed to Pakistan’s continued access to multilateral and bilateral financing, saying these funding sources remain available while the country’s strategic geopolitical importance in Central Asia and the Middle East provides additional support.

The bank recommended investors buy Pakistan’s sovereign dollar bonds maturing in 2031, 2036, and 2051, as well as the Water and Power Development Authority’s 2031 dollar bond. It also advised selling five-year Pakistan credit default swaps.

Although sovereign credit rating upgrades have taken longer than anticipated, Barclays said it expects rating agencies to take a more favourable view of Pakistan during the second half of 2026 if current economic trends continue.