Pakistan has recorded a remarkable improvement in its sovereign default risk, becoming the second-best performer globally after Türkiye, according to the latest Bloomberg data shared by Finance Minister’s advisor Khurram Shehzad. This achievement reflects growing investor confidence in Pakistan’s economic direction and reforms over the past fifteen months.
Between June 2024 and September 2025, Pakistan’s default risk fell significantly, securing the second position worldwide in terms of reduction. The improvement was measured using the Credit Default Swap (CDS) implied default probability, a key global benchmark for assessing sovereign risk. This strong performance highlights the country’s efforts to stabilize its financial outlook despite global uncertainties.
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One of the most notable aspects is that Pakistan remains the only emerging economy to show consistent quarterly improvement in default risk over the past year. During this period, the country’s sovereign risk dropped by nearly 2,200 basis points. In contrast, major economies such as Argentina, Egypt, and Nigeria have witnessed an increase in their default risks, underscoring Pakistan’s relative resilience.
Officials credit this progress to multiple factors, including macroeconomic stability, structural reforms, timely debt repayments, and strict adherence to the International Monetary Fund (IMF) program. Additionally, positive rating actions by global agencies such as S&P, Fitch, and Moody’s have reinforced international confidence in Pakistan’s financial credibility. These developments are seen as essential in reducing risks for global lenders and investors.
According to Khurram Shehzad, this sharp decline in risk is not just a number but a sign of investor trust returning to Pakistan’s economy. The government now positions itself as an emerging market with a sustainable credit story, aiming to restore its financial reputation while strengthening ties with international investors. If these trends continue, Pakistan could secure a stronger place among stable emerging economies in the coming years.