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 X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Paying the price
Updated 18 Apr, 2025

Paying the price

Pakistan is trapped in a relentless cycle of climate volatility.
Political solution
18 Apr, 2025

Political solution

THOUGH the BNP-M may have ended its 20-day protest sit-in outside Quetta on Wednesday, the core issues affecting...
Grave desecration
18 Apr, 2025

Grave desecration

THE desecration of 85 Muslim graves at a cemetery in Hertfordshire in the UK is a distressing act that deserves the...
Double-edged sword
Updated 17 Apr, 2025

Double-edged sword

While remittances have provided critical support to current account, they have also been a double-edged sword.
Besieged people
17 Apr, 2025

Besieged people

DESPITE all the talk about becoming a ‘hard’ state, Pakistan is still looking incredibly soft when it comes to...
Deadly zealotry
Updated 17 Apr, 2025

Deadly zealotry

Murdering people and attacking firms is indefensible and only besmirches the Palestinian cause.