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)
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Updated 28 June 2025
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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 urges equal application of international law, flags Indus treaty at UN debate

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Pakistan urges equal application of international law, flags Indus treaty at UN debate

  • Pakistani envoy says silence over violations of international law are fueling conflicts from South Asia to Gaza
  • He urges the UN secretary-general to use the Charter’s preventive tools more proactively to help avert conflicts

ISLAMABAD: Pakistan’s UN ambassador on Monday called for equal application of international law in resolving global conflicts, warning that India’s decision to hold the 1960 Indus Waters Treaty in abeyance and the unresolved dispute over Kashmir continued to threaten stability in South Asia.

Speaking at an open debate of the UN Security Council on “Leadership for Peace,” Ambassador Asim Iftikhar Ahmad said selective enforcement of international law and silence in the face of violations were fueling conflicts worldwide, undermining confidence in multilateral institutions.

His remarks come months after a brief but intense military escalation between India and Pakistan in May, following a gun attack on tourists in Indian-administered Kashmir. India blamed the attack on Pakistan, a charge Islamabad denied while calling for a transparent international probe.

The attack triggered a military standoff between the two South Asian nuclear neighbors and prompted New Delhi to suspend the World Bank-brokered Indus Waters Treaty, a move Pakistan says has no basis in international law and has described as “an act of war.”

“India’s unilateral suspension of the Indus Waters Treaty — a rare and enduring example of successful diplomacy — is yet another blatant breach of international obligations that undermines regional stability and endangers the lives and livelihoods of millions,” Ahmad told the council.

He said Jammu and Kashmir remained one of the oldest unresolved disputes on the Security Council’s agenda and required a just settlement in line with UN resolutions and the wishes of the Kashmiri people, a position India has long rejected.

Ahmad broadened his remarks to global conflicts, citing Gaza, Ukraine, Sudan and other crises, and said peace could not be sustained through “selective application of international law” or by sidelining the United Nations when violations occur.

The Pakistani envoy also referred to the Pact for the Future, a political declaration adopted by UN member states this year aimed at strengthening multilateral cooperation, accelerating progress toward the 2030 development goals and reforming global governance institutions.

While welcoming the pact, Ahmad warned that words alone would not deliver peace, pointing to widening development financing gaps, rising debt distress and climate shocks that he said were reversing development gains across much of the Global South.

He called for a stronger and more proactive role for the UN Secretary-General, including earlier use of preventive tools under the UN Charter, and urged the Security Council to demonstrate credibility through consistency, conflict prevention and greater respect for international court rulings.

“No nation can secure peace alone,” Ahmad said. “It is a collective endeavor, requiring leadership, cooperation and genuine multilateralism.”