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.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

By-election trends
Updated 23 Apr, 2024

By-election trends

Unless the culture of violence and rigging is rooted out, the credibility of the electoral process in Pakistan will continue to remain under a cloud.
Privatising PIA
23 Apr, 2024

Privatising PIA

FINANCE Minister Muhammad Aurangzeb’s reaffirmation that the process of disinvestment of the loss-making national...
Suffering in captivity
23 Apr, 2024

Suffering in captivity

YET another animal — a lioness — is critically ill at the Karachi Zoo. The feline, emaciated and barely able to...
Not without reform
Updated 22 Apr, 2024

Not without reform

The problem with us is that our ruling elite is still trying to find a way around the tough reforms that will hit their privileges.
Raisi’s visit
22 Apr, 2024

Raisi’s visit

IRANIAN President Ebrahim Raisi, who begins his three-day trip to Pakistan today, will be visiting the country ...
Janus-faced
22 Apr, 2024

Janus-faced

THE US has done it again. While officially insisting it is committed to a peaceful resolution to the...