Pakistan: Shehbaz Sharif govt's failure to seal deal with IMF to 'increase risk of default'
The cash-strapped country's current foreign exchange (FX) reserves stand at $4 billion. Approximately $900 million needs to be paid this month, causing the reserves to decline by the end of June unless IMF aid is received
Representational image
Amid bankruptcy, the Shehbaz Sharif-led Pakistani government’s failure to ink a deal with the International Monetary Fund (IMF) would significantly increase the likelihood of default, according to a report.
This comes after the global lender criticised Pakistan’s budget for its insufficient measures to broaden the tax base and its inclusion of a tax amnesty, Bloomberg reported.
The cash-strapped country’s current foreign exchange (FX) reserves stand at $4 billion. Approximately $900 million needs to be paid this month, causing the reserves to decline by the end of June unless IMF aid is received, according to reports.
Moreover, Islamabad faces the challenge of repaying an additional $4 billion between July and December. This amount cannot be rolled over.
As per the report, the likelihood of default becomes highly probable if the foreign exchange reserves remain below $4 billion at the start of fiscal year 2024.
Options for Pakistan to secure fresh external funding will be severely limited without an IMF programme.
(With inputs from agencies)
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.