ISLAMABAD: Pakistan has emerged as the most improved economy in the world in terms of sovereign risk, according to the latest data released by Bloomberg Intelligence. The country recorded the sharpest decline in default risk among all emerging markets over the past 12 months, signaling a strong return of investor confidence.
Bloomberg’s Credit Default Swap (CDS)-implied probability shows Pakistan’s default risk has dropped from 59% to 47%, reflecting an 11-percentage point improvement. This is the most significant reduction globally, placing Pakistan ahead of Argentina (7-point drop), Tunisia (4-point drop), and Nigeria (5-point drop).
In contrast, several other emerging economies, including Turkey, Ecuador, Egypt, and Gabon, witnessed a rise in default risk.
Analysts attribute Pakistan’s risk decline to a combination of effective economic measures, including macroeconomic stabilization, structural reforms, and consistent engagement with the International Monetary Fund (IMF). The government has met debt repayment deadlines and managed to stabilize its currency and reserves, which has boosted market sentiment.
Credit agencies such as S&P and Fitch have also revised Pakistan’s outlook positively in recent months, further reinforcing the country’s improved financial standing.
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This marked improvement sends a clear message to international markets: Pakistan is regaining economic credibility and moving forward with reform, resilience, and stability at its core.
