Pakistan leading emerging markets in reduced default risk

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Pakistan sees a decline in default risk in Global Emerging Markets Rankings. — X/@kschehzad
Pakistan sees a decline in default risk in Global Emerging Markets Rankings. — X/@kschehzad

Pakistan is leading the Global Emerging Markets (EM) Rankings, indicating improvement in default risk, Adviser to the Finance Minister Khurram Schehzad said on Saturday.

The current government has reassured that the country has moved onto a path of economic recovery and growth, witnessing “economic stabilisation” after a period of turbulence and uncertainty. Some assessments by global rating agencies have signalled gradual improvements in key economic indicators.

In a statement on X, Schehzad said, “As per the latest data posted by Bloomberg Intelligence, Pakistan stands out globally as the most improved economy in terms of reduction in sovereign default risk, as measured by CDS-implied probability.”

He said that the country has topped the Global Emerging Markets rankings with the “largest drop in sovereign default risk globally over the last 12 months”.

The statement said, “[The] default probability [went] down from 59 per cent to 47pc, a massive 1,100 basis points improvement.”

“This marks the sharpest decline among major emerging markets, ahead of Argentina (-7pc), Tunisia (-4pc), and Nigeria (-5pc).”

The country’s ranking contrasted with places like Turkey, Ecuador, Egypt, and Gabon, which have seen their default risks rise, it added.

The statement also said that the “sharp decline in Pakistan’s risk signals renewed investor confidence” through macroeconomic stabilisation, structural reforms, successful International Monetary Fund engagement and timely debt repayments, and improved credit outlooks by S&P, Fitch, and others.

Terming it “a resounding signal to global investors”, Schehzad said, “Pakistan is not only back on the map — it is moving forward with stability, credibility, and reform at its core.”

Earlier this month, Finance Minister Muhammad Aurangzeb unveiled the Pakistan Economic Survey 2024-25, exuding confidence that Pakistan’s economy would be able to post growth of 2.7 per cent in the outgoing fiscal year for the gross domestic product (GDP).

A United Nations report in May said that Pakistan was expected to experience “moderate growth, stabilising after a period of economic contraction”, with its GDP projected to expand by 2.3pc in 2025.

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