Pakistan economy has made headlines as one of the world’s fastest improving economies in reducing sovereign default risk, according to the latest Bloomberg data. This impressive performance reflects growing confidence among global investors and highlights the country’s economic resilience.
Advisor to the Federal Finance Minister, Khurram Schehzad, shared on X that the report underscores Pakistan’s significant progress in lowering its CDS-implied default probability, a key measure of sovereign credit risk.
He emphasized that this achievement signals enhanced investor trust in Pakistan’s financial and economic stability.
Bloomberg’s Global Emerging Market (EM) Rankings rank Pakistan second, just after Turkey, in reducing default risk. Over the past 15 months—from June 2024 to September 2025—Pakistan has recorded one of the steepest declines in default probability globally.
Uniquely, Pakistan stands out as the only emerging market demonstrating consistent quarterly improvement during this period.
The nation’s default risk has dropped dramatically by 2,200 basis points, surpassing reductions seen in South Africa (3%) and El Salvador (2%). Conversely, other major economies, including Argentina, Egypt, and Nigeria, have experienced rising default risks.
Analysts attribute Pakistan economy’s turnaround to sound macroeconomic policies, structural reforms, disciplined debt repayments, and steadfast adherence to the IMF program. Upgrades and positive actions by rating agencies like S&P, Fitch, and Moody’s have further strengthened investor confidence.
This sharp decline in sovereign default risk highlights Pakistan economy’s growing credibility in global markets. It positions the country as one of the most improved credit stories among emerging economies, reinforcing a positive outlook for long-term investment and economic growth.
