Islamabad: Contrary to the present finance minister’s claims, ex-Finance Minister Miftah Ismail believes that the path Pakistan is heading on might lead towards default as he called on the incumbent government to take steps to avert the looming threat.
While speaking to a private news channel, the former finance minister said that the threat of default will keep looming over Pakistan until the government completes the ninth review of the International Monetary Fund (IMF) program.
“Pakistan is in jeopardy; it has gone back in jeopardy and as long as IMF is not back on the table, the threat of default will remain high,” Miftah said.
In late August, the IMF had completed the combined seventh and eighth reviews of a loan facility for Pakistan, allowing immediate disbursement of $1.1 billion to the country under the Extended Fund Facility (EFF).
All you need to know about Pakistan, IMF deal
However, for the ninth review, the IMF mission had to visit Pakistan in November — which has already passed and the deadlock seems to persist.
It is important to note that the forex reserves of Pakistan have fallen to the lowest levels below $7 billion. At the same time, the mounting current account deficit makes it extremely difficult for the cash-strapped country to save its precious reserves.
Pakistan’s Current Account Deficit crosses $17B mark during FY22
Although Pakistan avoided the risks of an immediate default by paying a $1 billion international bond, concerns linger over Pakistan’s ability to pay its long-term debt.
According to SBP governor Jameel Ahmad, Pakistan needs to repay about $25 billion in the fiscal year 2022-23, though most of it has been rolled over or paid.
