Pakistan Sees World’s Biggest Drop in Debt Default Risk, Now 47% Less Likely to Default

Pakistan has achieved the sharpest decline in sovereign default risk among emerging markets over the past year, according to the latest report by Bloomberg Intelligence.

The country’s credit default swap (CDS)-implied default probability fell from 59 percent to 47 percent—an 11-percentage point drop. This marks the most substantial improvement globally, placing Pakistan at the top of Bloomberg’s rankings for emerging markets with reduced default risk.

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In contrast, other nations showed less progress: Argentina saw a 7-point decrease, Nigeria 5 points, and Tunisia 4 points. On the other hand, several countries, including Turkey, Ecuador, Egypt, and Gabon, recorded increases in their sovereign risk.

Pakistan’s improved risk profile is credited to successful macroeconomic stabilization measures, structural reforms, consistent engagement with the International Monetary Fund (IMF), timely debt servicing, and favorable ratings from international credit agencies like S&P and Fitch.