Pakistan tops global emerging market rankings in sovereign risk improvement — Bloomberg Intelligence

Vehicles move past a shipping container yard along a road in Karachi, Pakistan, on June 10, 2025. (REUTERS/File)
Short Url
Updated 28 June 2025
Follow

Pakistan tops global emerging market rankings in sovereign risk improvement — Bloomberg Intelligence

  • Government calls the development ‘a resounding signal’ to investors about Pakistan’s improving economy
  • It attributes the new outlook to economic stabilization, structural reforms and successful IMF engagement

KARACHI: Pakistan has recorded the world’s sharpest decline in sovereign default risk over the past year, topping Bloomberg Intelligence’s Global Emerging Market (EM) Rankings for credit risk improvement, according to new data cited by a senior finance official on Saturday.

The data, published by Bloomberg’s research arm, showed that Pakistan’s credit default swap-implied probability of default fell from 59 percent to 47 percent over the past 12 months, a drop of 11 percentage points. The change marks the biggest reduction among tracked emerging markets, outpacing countries like Argentina, Tunisia and Nigeria, as default risk rose in others such as Egypt, Gabon and Turkiye.

Credit default swaps (CDS) are insurance-like financial contracts that allow investors to hedge against the risk of a government failing to repay its debt. Issued and traded by large financial institutions, these contracts pay out in the event of a default. The higher the cost of a CDS, the greater the perceived risk. Bloomberg Intelligence uses CDS pricing to assess a country’s sovereign risk in its Global EM Rankings.

“Pakistan stands out globally as the most improved economy in terms of reduction in sovereign default risk,” said Khurram Schehzad, adviser to the finance minister, in a social media post. “This is a resounding signal to global investors: Pakistan is not only back on the map— it is moving forward with stability, credibility, and reform at its core,” he added.

Bloomberg Intelligence is a highly regarded financial data and media company widely used by global investors, analysts and institutions.

The improvement in Pakistan’s risk profile comes after the South Asian nation narrowly avoided a sovereign default in 2023. With dwindling reserves and mounting debt repayments, Islamabad secured a short-term bailout from the International Monetary Fund (IMF) with the support of key allies including Saudi Arabia, the United Arab Emirates and China.

Since then, Pakistan has undertaken a series of IMF-recommended structural reforms and fiscal adjustments aimed at stabilizing the economy.

Credit rating agencies such as Standard & Poor’s and Fitch have acknowledged the progress with improved outlooks, while the government has prioritized timely debt servicing and macroeconomic discipline.

Schehzad attributed the improved outlook to “macroeconomic stabilization, structural reforms, successful IMF engagement and timely debt repayments,” noting that investor confidence had begun to return.


Pakistan condemns Netanyahu’s ‘hexagon of alliances’ plan, says alert to growing India-Israel defense ties

Updated 26 February 2026
Follow

Pakistan condemns Netanyahu’s ‘hexagon of alliances’ plan, says alert to growing India-Israel defense ties

  • Israel’s Netanyahu last week proposed an alliance of countries in and around Middle East against its adversaries
  • Pakistan maintains “robust military preparedness” to deter any potential aggression, says foreign office spokesperson

ISLAMABAD: Pakistan’s foreign office spokesperson on Thursday condemned Israeli Prime Minister Benjamin Netanyahu’s recent statement about forming a “hexagon of alliances” within or around the Middle East, saying Islamabad was alert to growing defense ties between New Delhi and Tel Aviv. 

Netanyahu on Sunday outlined plans to form a new regional bloc, describing it as a “hexagon of alliances” that he said could include Israel, India, Greece and Cyprus, along with other unnamed Arab, African and Asian states. He said the grouping would collectively stand against what he described as “radical” adversaries.

His comments came days before Indian Prime Minister Narendra Modi arrived in Israel on Wednesday for a two-day trip to bolster ties. The two are expected to discuss cooperation in science and technology, innovation, agriculture, water management, technology, defense and security during the trip. 

The statement drew a sharp response from Pakistan’s Senate, which unanimously passed a resolution on Tuesday rejecting Netanyahu’s remarks.

“I would also like to draw your attention to the recent resolution adopted by the Senate of Pakistan that strongly condemned such remarks and attempts to undermine Muslim unity,” Foreign Office spokesperson Tahir Andrabi told reporters during a weekly press briefing.

“We continue to condemn these provocative steps and statements by the leadership of the occupying power that threaten regional peace and stability,” he added.

Netanyahu had also said Israel’s goal was to create an axis of nations that see eye to eye against what he described as the “radical Shia” and “radical Sunni” axis of nations. 

Andrabi said attempts to divide the Muslim world along sectarian lines were a “nefarious design” on Netanyahu’s part.

India is Israel’s largest arms buyer and second-largest trading partner in Asia, after China. In response to a question on India’s growing defense ties with Israel, Andrabi said Pakistan remained cognizant of the risks posed by such cooperation.

“Yes, we remain seized of the defense ties between Israel and India,” the spokesperson said, noting that certain “systems and platforms” may have been used by India against Pakistan in the past.

“We are alive to the threats they pose to our security, sovereignty and territorial integrity, as well as to regional peace and stability.”

Andrabi said Pakistan maintained “robust military preparedness” to deter any potential aggression from hostile forces.

‘UTMOST CAUTION EXERCISED’

Andrabi spoke about Pakistan’s recent strikes against alleged militant camps in Afghanistan, saying Islamabad had conducted them in self-defense and with extreme caution to avoid casualties. 

Pakistan said it carried out airstrikes in Afghanistan against militant camps and hideouts in three provinces on Saturday night, killing over 100 militants. Afghanistan accused Pakistan of violating its territorial sovereignty and killing dozens of civilians. Kabul has vowed to retaliate. 

Andrabi said the strikes were carried out to ensure protection for the lives of the people of Pakistan and to prevent “imminent terrorist attacks.”

“These actions were directed solely against identified terrorist camps and hideouts, and utmost caution was exercised to prevent harm to civilians,” he said. 

He warned Pakistan would take necessary measures under its right to self-defense against “terrorist threats” emanating from Afghan territory.

On the safety of Pakistani nationals in Afghanistan following the strikes, Andrabi said Islamabad had raised the issue with Afghan authorities, adding that Islamabad expected “foolproof security” for Pakistani diplomats and civilians.