ISLAMABAD: Advisor to the Finance Minister, Khurram Shahzad, has announced that Pakistan’s public debt decreased significantly by Rs 765 billion during August 2025. He shared the information in a post on the social media platform ‘X’.
Shahzad stated that this represents a major financial reduction and also reflects a decrease in the overall economic volume. He attributed this improvement directly to the government’s policies of fiscal discipline, strict expenditure control, and a prudent borrowing strategy.
According to the advisor, this debt reduction is a clear sign of progress towards achieving economic stability. He added that the government’s policy is restoring confidence among both domestic and foreign investors and is steering the country toward long-term financial sustainability.
Pakistan has demonstrated one of the most significant improvements globally in reducing its sovereign default risk over the past 15 months, positioning itself as a standout story in emerging markets, according to recent data from Bloomberg cited by a senior finance official.
From June 2024 to September 2025, Pakistan ranked as the second-most improved economy in emerging markets for reducing its default risk, trailing only Türkiye. This improvement is measured by the Credit Default Swap (CDS)-implied default probability, a key market gauge of sovereign credit risk.
Exclusive: Pakistan Sees One of the Sharpest Drops Default Risk – Only Country with Consistent Improvement
As per the latest data posted by Bloomberg, Pakistan stands out globally as the 2nd most improved economy in terms of reduction in sovereign default risk, as measured by… pic.twitter.com/Tziu8JVUiG
— Khurram Schehzad (@kschehzad) October 5, 2025
A finance adviser highlighted that Pakistan is the only country in the emerging market sample to show consistent quarterly improvement across the past year. The default probability for Pakistan fell by a substantial 2,200 basis points, marking the sharpest decline among major emerging economies, ahead of South Africa and El Salvador. In contrast, other nations like Argentina, Egypt, and Nigeria have seen their default risks increase during the same period.
