Pakistan has recorded one of the most significant declines in sovereign default risk globally ranking as the second-best performing country in the world, according to a new report by Bloomberg.
Adviser to the Finance Minister, Khurram Shehzad stated that between June 2024 and September 2025, Pakistan’s sovereign credit default swap (CDS) spread dropped by an impressive 2,200 basis points, one of the largest improvements among emerging economies.
Pakistan’s Strong Global Position
In a post on his official X (formerly Twitter) account, Khurram Shehzad shared:
“According to the latest Bloomberg data, Pakistan ranks second globally in improvement of sovereign default risk.”
He added that Pakistan is currently the only emerging market to have shown consistent quarter-on-quarter improvement over the past twelve months.
Key Figures
| Indicator | Details |
| Source of Report | Bloomberg (Credit Default Swap Data) |
| Period Analyzed | June 2024 – September 2025 |
| Global Rank | 2nd (after Turkey) |
| Drop in Default Risk | 2,200 basis points |
| Countries with Rising Risk | Argentina, Egypt, Nigeria |
| Countries with Declining Risk | Turkey, Pakistan, South Africa, El Salvador |
Pakistan’s Market Credibility Rebounds
Khurram Shehzad said this trend reflects growing investor confidence and macroeconomic stability in Pakistan.
“This reduction in default risk is a strong signal that global investors now perceive Pakistan as a less risky economy. It’s a clear sign of the country’s recovering market credibility,” he remarked.
Economists Highlight Key Drivers of Improvement
Experts attribute Pakistan’s improved economic outlook to several major factors:
- Better fiscal discipline under the IMF program
- Timely debt servicing and repayment commitments
- Consistency in structural reforms
- Financial support from friendly countries such as China, Saudi Arabia and the UAE
- Stabilization in exchange rate and foreign reserves
Khurram Shehzad’s Message to Investors
The Finance Minister’s adviser addressed investors saying:
“Pakistan is emerging as a positive credit story among developing markets. We have made substantial progress toward restoring our financial credibility and this upward trajectory will continue.”
Positive Signals from Global Rating Agencies
Shehzad also noted that international credit rating agencies including:
- S&P Global
- Fitch Ratings
- Moody’s Investors Service
have all confirmed positive trends in Pakistan’s financial indicators hinting at potential upgrades in the near future.
Background: From Economic Crisis to Stability
Pakistan faced a severe financial crisis over the past two years marked by:
- Foreign exchange reserves have fallen alarmingly
- The trade deficit has increased
- Increased dependence on imports
- And the risk of default reached a serious level in 2023
However, due to the IMF bailout package, financial assistance from friendly countries and fiscal discipline policies, Pakistan has taken the path of stability from the risk of default.
