The International Monetary Fund (IMF) has issued a warning about Pakistan’s upcoming payments in June and the uncertain situation that may follow. The country may face a default if it does not receive the IMF bailout package. Moody’s Investors Service has echoed the same concerns, stating that Pakistan could default without the IMF’s assistance. Analyst Grace Lim has further added that Pakistan’s financing options after June are highly uncertain and the country could default due to its weak reserves.
Pakistan is currently negotiating with the IMF in Washington to resume its bailout program. However, negotiations on the ninth review of the IMF package stalled in November last year. Despite the country’s efforts to resume the program, it has so far failed to convince the IMF through various measures, including floating exchange rates, additional taxes, and increasing energy tariffs.
Pakistan has secured financial assistance from Saudi Arabia and the United Arab Emirates, promising $3 billion, which is yet to be deposited in the central bank of the country. Despite this, Pakistan has faced a flood of financial woes in recent months due to political turmoil and repeated leadership changes, which have been flagged by international rating agencies as being at risk.
The Finance Minister Ishaq Dar and State Bank Governor Jameel Ahmed have reassured that Pakistan will not default on any of its international payments, and payments will be made on time. However, the situation remains uncertain, and the country may face severe consequences if it does not receive the IMF bailout package.
