Islamabad: Pakistan has become the most improved economy in the world in terms of sovereign risk reduction, going beyond the list of emerging markets with the strongest decline in the default probability, advisor to the Minister of Finance, Khurram Schehzad, said data published by Bloomberg Intelligence.
In a declaration on X, Schehzad said: “According to the latest data, Pakistan is distinguished in the world as the most improved economy in terms of reducing the risk of sovereign defect, as measured by the probability involved by CDs.”
The default probability involved by Pakistan CDS increased from 59% to 47%, marking an improvement of 1,100 basic points, said the advisor, adding that it was the greatest reduction among all major emerging market economies.
Other countries showing notable but lower improvements include Argentina (-7%), Tunisia (-4%) and Nigeria (-5%), while sovereign risk increased in economies such as Turkiye, Ecuador, Egypt and Gabon.
Schehzad described this development as a “resounding signal to global investors”, adding that the sharp decline reflects the growing confidence of investors in the economic trajectory of Pakistan.
It has attributed the improvement to key factors such as macroeconomic stabilization, the government’s structural reform program, timely debt reimbursements, solid engagement with the International Monetary Fund (IMF) and the improvement of Pakistan credit outlook by international rating agencies like S&P and Fitch.
“Pakistan is not only back on the global investment card – it advances with stability, credibility and reforms to its heart,” said Schehzad.
Meanwhile, Prime Minister Shehbaz Sharif expressed his satisfaction with the Bloomberg report on stability in the Pakistani economy.
“The report recognizes major institutional reforms in various sectors, a successful agreement with the International Monetary Fund and time reimbursements in a timely manner, which are certainly evidence of improvement in the government’s economic situation,” he said.
“Pakistan is one of the few countries which, according to Bloomberg, have shown the most improvement in the economy in the past 12 months,” he said, “Pakistan is quickly heading for its strong economic future.”
The Prime Minister concluded by saying that improved economic indicators were the result of hard work and dedication of the government’s economic team.
The improved risk of Pakistan follows its narrow flight from the sovereign defect in 2023. Faced with close reserves and assembly debts of lower weakness, Islamabad obtained short -term bailout of the International Monetary Fund (IMF), supported by key allies like Saudi Arabia, the United Arab Emirates and China.
The next day, the country has implemented a range of structural reforms and advised budgetary measures by the IMF to achieve macroeconomic stability.
Earlier this month, Finance Minister Muhammad Aurangzeb said Pakistan’s economy had probably increased by 2.7% during the fiscal year ending in June 2025 after increasing 2.5% in the previous year.
The government initially targeted 3.6% of the gross domestic product for this exercise, but reduced this to 2.7% last month. The International Monetary Fund forecasts growth of 2.6% this exercise and 3.6%.
The government is targeting growth of 4.2% in the next financial year in the midst of competing priorities, including an increase in investments, maintaining a primary surplus and the management of defense spending in the midst of tensions with India.