LAHORE – According to a report published by Bloomberg Intelligence, Pakistan has recorded the steepest decline in sovereign default risk among other emerging markets over the period of last year.
The country’s credit default swap (CDS) saw a sharp decrease of 12 percent. The default probability has dropped from 59 percent to 47 percent, and the 12-point percentage improvement is recorded to be the most significant improvement globally. This reduction places Pakistan at the very top of Bloomberg’s global rankings for countries that are showing improvement in default risk.
Other countries, such as Argentina, saw a 7-point reduction, Tunisia a 4-point reduction, and Nigeria a 5-point reduction. However, emerging markets, which include Turkey, Ecuador, Egypt, and Gabon, experienced an increase in sovereign risk level.
The enhancement of Pakistan’s risk profile is due to several factors, including macroeconomic stabilization, structural reforms, effective collaboration with the International Monetary Fund (IMF), timely debt repayments, and favorable assessments from international credit rating agencies like S&P and Fitch.
