ISLAMABAD: Pakistan has topped global emerging markets in reducing sovereign default risk, marking the most significant improvement, according to data from Bloomberg Intelligence.

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

Pakistan’s CDS-implied default probability dropped from 59% to 47%, marking an improvement of 1,100 basis points, the adviser said, adding that this was the largest reduction among all major emerging market economies.

Other countries showing notable but smaller improvements include Argentina (-7%), Tunisia (-4%), and Nigeria (-5%), while sovereign risk has increased in economies such as Turkiye, Ecuador, Egypt, and Gabon.

Schehzad termed this development a “resounding signal to global investors,” adding that the sharp decline reflects growing investor confidence in Pakistan’s economic trajectory.

He attributed the improvement to key factors such as macroeconomic stabilisation, the government’s structural reform agenda, timely debt repayments, strong engagement with the International Monetary Fund (IMF), and improvement of Pakistan’s credit outlook by international credit rating agencies like S&P and Fitch.

“Pakistan is not only back on the global investment map—it is advancing with stability, credibility, and reforms at its core,” Schehzad stated.

Meanwhile, Prime Minister Shehbaz Sharif expressed satisfaction with the Bloomberg report on stability in the Pakistani economy.

"The report acknowledges important institutional reforms in various sectors, successful agreement with the International Monetary Fund and timely loan repayments, which are definitely evidence of improvement in the government’s economic situation," he said.

“Pakistan is among the few countries that, according to Bloomberg report, showed the most improvement in the economy in the last 12 months,” he said adding, “Pakistan is moving fast towards its strong economic future.”

The premier concluded by saying that the improved economic indicators were the result of consistent hard work and dedication of the government’s economic team.

Pakistan’s improved risk follows its narrow escape from sovereign default in 2023. Facing critically low foreign reserves and mounting debt obligations, Islamabad secured a short-term bailout from the International Monetary Fund (IMF), backed by key allies such as Saudi Arabia, the United Arab Emirates, and China.

In the aftermath, the country has implemented a range of IMF-advised structural reforms and fiscal measures aimed at achieving macroeconomic stability.

Earlier this month, Finance Minister Muhammad Aurangzeb said that Pakistan's economy likely grew 2.7% in the fiscal year ending June 2025 after expanding 2.5% in the previous year.

The government initially targeted 3.6% growth in gross domestic product for this financial year, but lowered that to 2.7% last month. The International Monetary Fund expects growth of 2.6% this financial year and 3.6% next.

The government is aiming for 4.2% growth next fiscal year amid competing priorities, including boosting investment, maintaining a primary surplus, and managing defence spending amid tensions with India.