Pakistan’s Default Risk Increased as Imran Khan Arrest May Delay IMF Deal:
As a result of the political upheaval triggered by the arrest of former Prime Minister Imran Khan, Pakistan is facing a heightened risk of default, which may further delay an IMF bailout. Eng Tat Low, a sovereign analyst for emerging markets at Singapore’s Columbia Threadneedle Investments, expressed concerns about Pakistan’s ability to avoid default in the absence of fresh funding support. He also raised doubts about the likelihood of an IMF deal, citing the country’s substantial debt amortization obligations and precarious reserves as factors indicating an imminent default.
The government is currently engaged in negotiations with the IMF to revive a $6.5 billion bailout program, which is crucial for avoiding default. However, the country is experiencing economic unrest amidst these challenging circumstances.
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