ISLAMABAD: Pakistan has emerged as the world’s second most improved economy in terms of reducing sovereign default risk, trailing only Turkiye among global emerging markets, according to new data reported by Bloomberg.
Citing Bloomberg data, Adviser to the Finance Minister Khurram Schehzad said on Sunday that Pakistan recorded a 22% reduction in sovereign default risk over the past 15 months — from June 2024 to September 2025 — as measured by credit default swap (CDS)-implied default probability.
“This is one of the sharpest declines in default risk among all major emerging markets, with Pakistan ranking second globally, just behind Turkiye,” Schehzad wrote in a post on social media platform X.
In contrast, the Adviser noted, several emerging economies such as Argentina, Egypt, and Nigeria had witnessed rising default risks during the same period.
🇵🇰 پاکستان میں دیوالیہ ہونے کے خدشات میں خاطر خواہ کمی — مسلسل بہتری دکھانے والا واحد ملک
بلوم برگ کے تازہ اعداد و شمار کے مطابق، پاکستان اُن چند ممالک میں شامل ہے جنہوں نے دیوالیہ ہونے کے خدشات میں سب سے بڑی کمی دکھائی ہے۔
پاکستان کی کارکردگی دنیا بھر کی ابھرتی ہوئی معیشتوں… pic.twitter.com/JaY8Y5QD5P
— Khurram Schehzad (@kschehzad) October 5, 2025
Investor confidence and economic reforms
Schehzad said the drop in Pakistan’s default risk reflected strengthening investor confidence and improved macroeconomic stability.
He attributed the progress to a combination of structural reforms, timely debt servicing, and the government’s adherence to the International Monetary Fund (IMF) programme.
He added that positive outlooks and ratings from international credit rating agencies — including S&P Global, Fitch Ratings, and Moody’s Investors Service — had also supported Pakistan’s recovery narrative.
“Pakistan is steadily rebuilding market credibility and now stands out as one of the most improved sovereign credit stories in the emerging market universe,” the Adviser stated.
Economic stability and IMF engagement
The Bloomberg report comes as Pakistan continues its discussions with the IMF over the extended programme. Earlier this month, Finance Minister Muhammad Aurangzeb said talks with the Washington-based lender were progressing in the “right direction”.
He expressed confidence that Pakistan’s economic reforms — including efforts to increase the tax-to-GDP ratio to 11% — would strengthen fiscal stability and attract sustained foreign investment.
Consistent improvement
According to the Bloomberg data shared by Schehzad, Pakistan is the only country in the emerging market sample showing consistent quarterly improvement throughout the past year.
The government’s focus on maintaining fiscal discipline and honouring external debt obligations has been key to this performance, the Adviser stated.
