Pakistan records largest drop in default risk among emerging markets
Listen to article
Pakistan has achieved the world's steepest decline in sovereign default risk over the past year, leading Bloomberg Intelligence's Global Emerging Market (EM) Rankings for credit risk improvement, according to data released by the finance minister's adviser on Saturday.
Bloomberg, the international financial information and media firm, has described Pakistan as the most improved economy in terms of reducing default risk.
The report attributes this progress to renewed investor confidence, macroeconomic stabilisation, structural reforms, successful engagement with the International Monetary Fund (IMF), timely debt repayments, and positive credit outlooks from global rating agencies including Fitch and S&P.
According to Bloomberg's research division, Pakistan's credit default swap (CDS)-implied probability of default declined from 59 per cent to 47 per cent over the last 12 months — an 11 percentage point drop and the largest reduction among emerging markets globally.
This improvement outpaces other countries such as Argentina, Tunisia, and Nigeria, while some nations including Egypt, Gabon and Turkey have seen their default risks increase.
Breaking: Pakistan Leads the World in Sovereign Risk Improvement - Tops Global EM Rankings
As per the latest data posted by Bloomberg Intelligence, Pakistan stands out globally as the most improved economy in terms of reduction in sovereign default risk, as measured by… pic.twitter.com/FX4fR8QVFD
— Khurram Schehzad (@kschehzad) June 28, 2025
Khurram Shehzad, adviser to the finance minister, took to social media platform X to highlight Pakistan's achievement, stating that the country 'stands out globally as the most improved economy in terms of reduction in sovereign default risk.'
Read More: Pakistan, WB boost ties with $40b framework
He further added that this 'marks the sharpest decline among major emerging markets,' and credited factors such as macroeconomic stabilisation, structural reforms, successful IMF engagement, and timely debt repayments for the positive trend.
'This is a resounding signal to global investors that Pakistan is not only back on the map — it is moving forward with stability, credibility, and reform at its core,' he said.
Prime Minister Shehbaz Sharif welcomed the Bloomberg report, expressing satisfaction over the acknowledgment of Pakistan's economic stability.
'The report acknowledges important institutional reforms in various sectors, successful agreement with the IMF, and timely loan repayments, which are definitely evidence of improvement in the government's economic situation,' he remarked.
Also Read: Global ranking of green passport improves
He added that Pakistan was among the few countries to show the most economic improvement in the past year, according to Bloomberg's data, and said the country was advancing swiftly towards a stronger economic future.
The prime minister attributed these gains to the sustained efforts and dedication of the government's economic team.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
5 hours ago
- Express Tribune
Pakistan tops rankings for risk improvement
Listen to article In a major economic milestone, Pakistan has emerged as the top-performing market in the Global Emerging Market (EM) Rankings for reducing sovereign credit risk, according to a new Bloomberg Intelligence report. Over the past 12 months, Pakistan recorded the largest drop in sovereign default risk worldwide, measured through Credit Default Swaps (CDS), highlighting improved creditworthiness and economic stability. The CDS-implied probability of default has decreased significantly, positioning Pakistan at the forefront of the global EM pack. While Bloomberg's terminal data isn't widely accessible, the report was shared by Finance Minister's adviser Khurram Schehzad on social media platform X, sparking optimism within the financial community. Schehzad wrote, "As per the latest data posted by Bloomberg Intelligence, Pakistan stands out globally as the most improved economy in terms of reduction in sovereign default risk, as measured by CDS-implied probability." He added, "This is a resounding signal to global investors: Pakistan is not only back on the mapit is moving forward with stability, credibility, and reform at its core." According to the report, Pakistan's default probability fell from 59% to 47%, marking an 1,100 basis point improvementsharper than reductions seen in Argentina (7%), Tunisia (4%), and Nigeria (5%). In contrast, countries like Turkey, Ecuador, Egypt, and Gabon saw increases in their risk levels.
Express Tribune
7 hours ago
- Express Tribune
PM hails arbitration court's supplemental award over IWT
Prime Minister Shehbaz Sharif chairs a review meeting on Hajj arrangements for the upcoming year in Islamabad on Saturday, June 21, 2025. Photo courtesy: Radio Pakistan Prime Minister Shehbaz Sharif on Saturday welcomed Permanent Court of Arbitration's Supplemental Award regarding Indus Waters Treaty (IWT). The prime minister said that the judicial ruling strengthened Pakistan's stance, asserting that India has no authority to suspend the agreement unilaterally. "We are working upon water resources as the water is the lifeline for the people of the country, PM Office Media Wing, in a press release, quoted the prime minister as saying. Bloomberg report Prime Minister Shehbaz Sharif expressed satisfaction over Bloomberg report on stability in Pakistani economy. He said, "The report acknowledges important institutional reforms in various sectors, successful agreement with the International Monetary Fund and timely loan repayments, which are definitely evidence of improvement in the government's economic situation." "Pakistan is among the few countries that, according to Bloomberg report, showed the most improvement in the economy in the last 12 months," he said adding, "Pakistan is moving fast towards its strong economic future." Rain situation Prime Minister Shahbaz Sharif telephoned National Disaster Management Authority (NDMA) Chairman Lieutenant General Inam Haider Malik and discussed with him aspects related to disaster management. The chairman NDMA briefed the prime minister on the recent rainfall situation in the country.
Business Recorder
9 hours ago
- Business Recorder
Words of caution from Summer Davos
EDITORIAL: It's not every day that the president of the World Economic Forum warns of a 'decade of lower growth.' But that's precisely the message Børge Brende delivered at Summer Davos in Tianjin — a sobering forecast that goes beyond the usual Davos-speak of digital revolutions and climate partnerships. The world, he said, is entering its most geopolitically complex period in decades, and the headwinds facing global growth are intensifying, not fading. Markets have grown used to brushing off geopolitical shocks. The pandemic was followed by a rapid recovery. Russia's invasion of Ukraine triggered initial panic, but portfolio flows resumed quickly. Even the Israel–Iran war, despite its high stakes, has not yet translated into a prolonged financial crisis. But the accumulation of risks — trade fragmentation, armed conflict, political instability — is beginning to show up in macro projections. Both the World Bank and IMF have now revised global growth forecasts for 2025 downward, from 2.7pc to around 2.3pc. That may not sound catastrophic, but in a world fuelled by debt and liquidity, even a half-point drag on global GDP has wide-ranging implications. It affects not just trade flows and commodity demand, but sovereign debt sustainability, social stability, and the room central banks have to ease. Brende's warning is timely, not just because of the numbers, but because of the structural shifts underway. The world isn't simply in a slowdown — it's in the early stages of a strategic reordering. The US-China trade war, once dismissed as a Trump-era anomaly, is now institutionalised policy. China, which still accounts for about 30 percent of global growth, is shifting inward — away from export dependency and toward domestic consumption and digital services. That transition is necessary, but it's not without turbulence. Beijing's real estate market remains fragile, consumer confidence is uneven, and supply chain recalibrations are far from complete. If the Chinese engine sputters, the rest of the world will feel it. In parallel, the multilateral trade order that underpinned decades of growth is losing traction. New regional blocs, tariff walls, and subsidy races have become the norm. The return of industrial policy may excite national planners, but it fragments global efficiency. When war in one region sends insurance premiums, energy costs, and shipping rates soaring, it becomes harder to pretend these shocks are local. They're systemic—and cumulative. What's particularly worrying is that none of this exists in isolation. As Brende pointed out, the traditional lines between economic and security policy are now blurred. Conflict doesn't just disrupt supply chains; it drives trade strategy. Currency wars give way to chip bans. Defence deals morph into energy alliances. And through it all, global governance institutions struggle to keep pace. For developing economies, including Pakistan, this complexity is doubly dangerous. Growth in the Global South has historically ridden the coattails of open trade, capital flows, and commodity cycles. Now, with a flipped interest rate cycle, declining aid flows, and a global turn inward, that model is under pressure. And while the wealthy world debates reshoring and AI regulation, developing countries are facing food inflation, energy volatility, and climate shocks without the fiscal space to absorb them. The point is not that growth will vanish. It won't. But its sources, reliability, and beneficiaries are shifting. If the coming decade is marked by structural fragmentation and political brinkmanship, growth will become a more selective story—dependent on stability, institutional strength, and geopolitical alignment. Brende's message, then, isn't just a warning. It's a challenge to policymakers who still act like the post-2008 playbook applies. It doesn't. The new normal is one of overlapping crises, diminishing buffers, and increasingly short market patience. Anyone not preparing for that reality is setting themselves up for failure. Copyright Business Recorder, 2025
