Dawn
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17:32 Oct 05, 2025
Pakistan has recorded one of the “sharpest drops” in sovereign default risk globally and now ranks as the second-best performer in the world, according to Credit Default Swap (CDS)-implied data reported by Bloomberg, adviser to the finance minister Khurram Schehzad said on Sunday. A Credit Default Swap-implied probability estimates the likelihood that a borrower — such as a company or a country — will fail to repay its debt. This probability is derived from the market price of its CDS, which is a type of financial insurance investors buy to protect themselves against the risk of default, according to the International Monetary Fund (IMF). If the cost of a CDS drops, it means investors see the borrower as less risky. So, when Pakistan’s CDS-implied probability falls sharply, it indicates that global investors believe the country’s chances of defaulting on its debt have significantly decreased. “As per the latest data posted by Bloomberg, Pakistan stands out globally as the 2nd most improved economy in terms of...