Bloomberg Data Highlights Pakistan as the Only Emerging Market with Consistent Quarterly Improvement, Signaling a Dramatic Restoration of Investor Confidence.
ISLAMABAD, OCT 5 /DNA/ – Recent data from Bloomberg underscores a remarkable turnaround in Pakistan’s economic standing, positioning the nation as one of the most improved sovereign credit stories globally. Over the past 15 months (from June 2024 to September 2025), Pakistan has achieved the second-sharpest reduction in sovereign default risk among global emerging markets, trailing only Turkey.
This improvement is measured by the Credit Default Swap (CDS)-implied default probability, a key market gauge of country risk. Pakistan’s default probability has plummeted by an extraordinary 2,200 basis points, marking the most significant decline among major emerging economies and far surpassing improvements seen in nations like South Africa (-3%) and El Salvador (-1.95%).
A critical differentiator in Pakistan’s performance is its consistency. Bloomberg analysis notes that Pakistan is the only country in the emerging market sample to have demonstrated sequential, quarterly improvement over the last year. This consistent positive trajectory stands in stark contrast to other EMs, including Argentina, Egypt, and Nigeria, which have seen their default risks increase during the same period.
This sharp decline in sovereign risk is a powerful signal of strengthening international investor confidence, underpinned by several key factors:
Macroeconomic Stabilization: Prudent fiscal and monetary policies have significantly curbed inflation and stabilized the currency.
Structural Reforms: The government has持续推进 structural reforms aimed at enhancing revenue collection, improving the energy sector, and fostering a more competitive business environment.
Timely Debt Servicing: A demonstrated commitment to meeting all sovereign debt obligations on time has been crucial in rebuilding market trust.
Commitment to the IMF Program: Adherence to the International Monetary Fund program has provided a credible anchor for economic policies and reform implementation.
Positive Ratings Actions: Leading credit rating agencies, including S&P Global, Fitch Ratings, and Moody’s, have taken positive actions, either upgrading Pakistan’s outlook or affirming its ratings, citing improving external dynamics and policy continuity.
Message to the Investment Community:
“Pakistan is steadily rebuilding its market credibility,” the data conclusively shows. The nation’s journey from a country of concern to one of the most improved sovereign credits in the emerging market universe is a testament to the positive outcomes of sustained policy discipline and reform commitment. For global investors seeking turnaround stories with demonstrable momentum, Pakistan now presents a compelling case of rapid and consistent improvement.
