Pakistan sees sharpest drops in default risk, says advisor to finance minister

Advisor to Finance Minister Khurram Schehzad on Sunday said that in a remarkable shift, Pakistan has emerged as one of the top-performing countries in terms of reducing its default risk, recording one of the sharpest declines globally.

As per the latest data posted by Bloomberg, Pakistan stands out globally as the second most improved economy in terms of reduction in sovereign default risk, as measured by CDS-implied default probability globally, the advisor to finance minister posted on social media site X.

He said that Pakistan stood second only to Turkey in Global Emerging Market (EM) Rankings in Default Risk Reduction, as the country has recorded one of the sharpest drops in sovereign default risk globally over the last 15 months — since Jun-24 till Sep-25.

Notably, Pakistan is the only country in the EM sample showing consistent quarterly improvement across the past year, he said, adding that default probability has decreased by a massive 2,200 basis points.

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He said that this marks the sharpest decline among major EMs, ahead of South Africa (3%) and EI Salvador (2%).

Schehzad said that, in contrast, countries like Argentina, Egypt, Nigeria and others have seen their default risks rise.

This sharp decline in the country’s risk signals strengthening investor confidence, underpinned by macroeconomic stabilisation, structural reforms, timely debt servicing, staying the course with the IMF programme and positive ratings actions from S&P, Fitch, and Moody’s, he added.

The advisor said that Pakistan is steadily rebuilding market credibility, standing out as one of the most improved sovereign credit stories in the emerging market universe.