Pakistan has recorded one of the steepest declines in sovereign default risk, ranking second globally based on Credit Default Swap (CDS)-implied probability, Finance Adviser Khurram Schehzad said Sunday, citing Bloomberg data.
A CDS-implied probability reflects the market’s projection of a borrower’s chance of default, derived from the spread of its CDS contract.
According to Schehzad, Pakistan is behind only Turkiye in Emerging Market rankings, with default risk reduced by 22 percent over the past 15 months (June 2024–September 2025). “Default probability dropped by a massive 2,200 basis points,” he noted on X, adding that Pakistan was the only EM country to show consistent quarterly improvement over the year.
The development comes as Pakistan pushes forward with economic recovery under a $7 billion IMF program. Schehzad attributed the sharp drop in risk to improved macroeconomic stability, structural reforms, timely debt servicing, adherence to the IMF roadmap, and favorable rating actions by global agencies such as S&P, Fitch, and Moody’s.
“Message to investors: Pakistan is steadily restoring market credibility and emerging as one of the strongest turnaround stories in the sovereign credit landscape,” he added.
asd PM Shehbaz: Pakistan Successfully Averts Risk of Potential Default
