Pakistan could default without an International Monetary Fund (IMF) bailout as its financing options beyond June are uncertain, ratings agency Moody’s was quoted as saying in a report published by Bloomberg on Tuesday.

“We consider that Pakistan will meet its external payments for the remainder of this fiscal year ending in June,” said Grace Lim, a sovereign analyst with the ratings company in Singapore.

“However, Pakistan’s financing options beyond June are highly uncertain. Without an IMF programme, Pakistan could default given its very weak reserves.”

Pakistan entered into a $6.5 billion programme with the IMF in 2019. But the programme’s ninth review for the release of $1.2 billion is pending since October last year as the government has been unable to meet some of the pre-requisites set by the lender.

The IMF tranche is critical for Pakistan as it will also unlock financing from friendly countries, helping Pakistan avert default.

The country has been witnessing economic turmoil since last year, with its foreign exchange reserves down to critical levels while talks with the IMF for the release of the pending tranche have remained unsuccessful thus far.

A delegation of IMF was in Pakistan in February this year for talks with the government to revive the programme.

After the delegation left, Finance Minister Ishaq Dar said negotiations with the lender had “nearly concluded” and a staff-level agreement would happen “next week”. But more than two months since then, an agreement is still not in sight.

Meanwhile, reserves held by the State Bank of Pakistan stood at $4.46 billion during the week ending on April 28, enough to cover just a month’s imports.

Inflation has also soared to unprecedented levels. The consumer price index rose to a record 36.4 per cent in April from a year earlier, driven largely by skyrocketing food prices and rising energy costs.