ISLAMABAD: S&P Global Ratings on Thursday warned regional credit risks owing to escalating tensions between Pakistan and India.

In a statement, the New York-based one of the top three global rating firms anticipated intense military actions by the two sides as temporary with contained confrontations but warned that miscalculations could significantly increase credit risks for both sovereign nations.

Pakistan’s armed forces have reported to have taken down 25 Israeli-made Harop drones sent into the country by India since last night, the Inter-Services Public Relations (ISPR) said on Thursday.

A day earlier, Pakistan mourned the loss of 31 lives in overnight attacks by Indian forces on civilians, describing New Delhi’s actions as “terrorism” and accusing it of continuous ceasefire violations on the Line of Control (LoC).

Despite the warning and increased escalation, S&P did not anticipate an immediate impact on both countries’ credit ratings, adding that tensions would remain high in the coming weeks, with possible further military actions, but an ensuing de-escalation will limit lasting negative effects on sovereign creditworthiness.

It said that neither country will gain from a prolonged conflict, as it would derail Pakistan’s road to macroeconomic stability and deter foreign investment in India amid global economic volatility.

Published in Dawn, May 9th, 2025