The year, 2025, has come close to the end. This is a year which has been marked by significant developments. On the positive side, Pakistan’s vulnerability in external transactions has diminished. Foreign exchange reserves are now providing import cover of over two months. There is also a slight improvement in the GDP growth rate and a big fall in the rate of inflation.
This is an appropriate time to find out how Pakistan features currently in various international rankings. Examination of where Pakistan stands internationally and especially within South Asia will indicate how potential foreign investors and others are likely to perceive Pakistan in terms of its strengths and weaknesses. This will also indicate the priority areas in the economy and in governance which need to be improved to attract more foreign investment, loan financing by international commercial banks and facilitate the flotation of global flotation of bonds.
The international ranking changes over time also enable a, more or less, objective assessment of the performance of a government during its tenure. If there is improvement in the majority of rankings then this provides a basis for conclusion of a good performance.
This article looks at Pakistan’s performance in seven key international rankings. Inevitably, the first area of focus in Pakistan position in credit-rating. It is essential to see how Pakistan is perceived currently in terms of its credit-worthiness.
The next set of rankings relate to broader performance in the economic front in terms of the ease of doing business, financial development, innovation, level of economic freedom and corruption. The last ranking focuses on the human development index, which highlights more the long-term trends in the country in relation to other countries in overall development.
Pakistan’s credit rating is based on the assessment by S&P, Moody’s and the Morningstar DBRS. The rating scale of each agency is from the best of AAA to the lowest at DD. The ratings of a country by each agency are combined to produce an overall score, TE, which ranges from 0 to 100. Altogether, the latest assessment includes 155 countries.
The latest rating of Pakistan is of B- by S&P and Caa by Moody’s. No rating has been given to Pakistan by the DBRS. Overall, the score, TE, of Pakistan is 21 out of 100. The resulting ranking of Pakistan out of the 155 countries is 131. This is the 84th percentile in the ranking; the higher the percentile the worse the ranking. Therefore, Pakistan still has a relatively low credit-rating. Hopefully, with the successful continuation of the IMF Programme this rating will improve further in 2026 along with further enhancement in foreign exchange reserves.
A comparison with other South Asian countries reveals that Pakistan has a better ranking than Sri Lanka of 145th. In fact, Sri Lanka had defaulted three years ago and has also been through an IMF Programme. The other two countries, Bangladesh and India, have better rankings of 99 and 61, respectively.
The next ranking of Pakistan that is determined is in the Financial Development Index of the World Economic Forum. The latest ranking is for 2021. It pertains to development, access and efficiency of financial institutions and markets.
Pakistan has a value in this index of 0.220. This is lower than that of Bangladesh, Sri Lanka and India at 0.243, 0.251 and 0.534, respectively. Pakistan has the ranking of 103rd in 178 countries, which places the country in the 58th percentile. The relatively better ranking is a reflection of the large and diversified financial sector in the country. However, the large-scale preemption of credit by the government has probably adversely affected the ranking.
An unusual index is the Global Innovations Index, which is prepared and released by the World Intellectual Property Organization. A Global Innovation Tracker Dashboard has been set up, which assesses in a country the science and innovation investment, technological progress, technology adaption and socio-economic impact.
The good news is that Pakistan performs better in this index of innovation. It is ranked 91 out of 133 countries. This is a better ranking than that of Bangladesh, which has a ranking of 106. The place of Pakistan is at the 68th percentile.
There is need, in particular, to recognize the innovation in the small and medium enterprise (SME) sector of Pakistan. This sector exports sophisticated products like surgical instruments, sports goods, medicines and value-added textiles.
We turn next to the World Bank’s Ease of Doing Index of 2025. Among South Asian countries, Pakistan does better than Bangladesh. Pakistan’s ranking is 108, while Bangladesh’s is much lower at 168.
Pakistan is placed in the 57th percentile of the rankings. It has a better ranking in starting business, protecting minority investors and resolving insolvency. However, it performs more poorly in registering property, paying of taxes, enforcing contracts and getting electricity.
A wide-ranging and useful index is the Index of Economic Freedom of the Heritage Foundation. It includes an assessment of property rights, government integrity, judicial effectiveness, fiscal health, tax burden, government effectiveness and trade freedom.
According to the latest index values for 2025, the four South Asian countries are clustered closely in the range of 49 to 53 out of 100. Pakistan has an index value of 49.1 and the percentile position is 72nd.
The performance of Pakistan is considered better in trade freedom, investment freedom, government spending and the tax burden. However, the country has a low index value in property rights, government integrity, judicial effectiveness and fiscal health.
The next index is a widely quoted index which is named the Corruption Perceptions Index and is prepared annually by the Transparency International. The last scores and rankings are for 2024.
Accordingly, Pakistan is ranked 135 out of 180 countries. This places the country in the 75th percentile of the rankings. Here again, Pakistan does better than Bangladesh, which has the ranking of 151.
There is a need to see the change in ranking of Pakistan over the years as the incidence of corruption has been highlighted in a recent report by the IMF. In 2015, Pakistan was placed at 117 out of 168 countries, equivalent to the 70th percentile. Therefore, there has been some worsening in Pakistan’s ranking over the last decade. This can be seen as a justification for the IMF report.
We come finally to the Human Development Index (HDI) of the United Nations Development Programme. This is considered generally as the most appropriate index to assess the overall economic state of a country.
The HDI has three components of education, health and per capita income. It is an indictment of Pakistan, as it has the lowest ranking of 168 among South Asian countries. This ranking places the country in the 87th percentile and categorizes Pakistan with a low level of human development. Among the three indicators, the worst ranking of Pakistan is in education.
A comparison is made with Pakistan’s HDI ranking in 2015. It was placed at the ranking of 147 out of 188 countries, equivalent to the 78th percentile. It is now at the 87th percentile. Therefore, Pakistan has performed poorly in human development over the last decade.
The above seven rankings of Pakistan in different measures and indices are presented below. The higher the percentile the worse the ranking.
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Pakistan’s
Percentile
Position
Credit-Rating 84
Financial Development 58
Innovation 68
Ease of Doing Business 57
Economic Freedom 72
Corruption Perceptions 75
Human Development 87
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There is a wide variation in the percentile position of Pakistan among countries in the various indices. Pakistan performs better in ease of doing business, financial development and innovation. It has a relatively very low position in credit-rating and human development. There has also been some worsening in Pakistan’s ranking in the last decade.
Overall, it is clear that salutary efforts will need to be made to improve Pakistan’s performance for potential foreign investors to have a more positive perception of the country. This will also need to be accompanied by a turn-around from the current domestic private investment slump in the country, which is conveying the wrong market signals.
Copyright Business Recorder, 2025
The writer is Professor Emeritus at BNU and former Federal Minister
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