As political upheaval prompted by the Arrest of former Prime minister Imran Khan threatens to postpone an IMF bailout, Pakistan is inching closer to a default.
“It looks increasingly difficult for Pakistan to avoid a default in the absence of fresh funding support coming in,” said Eng Tat Low, a sovereign analyst for emerging markets at Singapore’s Columbia Threadneedle Investments.
“I am also growing more skeptical whether an IMF deal is going to come through. Their heavy debt amortization against precarious reserves would suggest default is imminent,” he mentioned.
As the government bargains with the IMF to resume a $6.5 billion bailout programme it needs to avoid default, economic unrest has broken out.
