Pakistan faces risk of default by November 2023, warns Miftah Ismail

Pakistan faces risk of default by November 2023, warns Miftah Ismail

KARACHI: Former Finance Minister Miftah Ismail has expressed concerns over Pakistan’s fiscal situation, indicating a potential default by November 2023.

In an interaction with members of the Council of Economics and Energy Journalists (CEEJ) on Thursday evening, Ismail emphasized the necessity of International Monetary Fund (IMF) assistance to prevent a financial crisis.

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As a prominent figure in the ruling Pakistan Muslim League (PML-N), Ismail shed light on the country’s challenging external debt repayment obligations and discussed his political future alongside former Prime Minister Shahid Khaqan Abbasi.

Miftah Ismail highlighted the gravity of Pakistan’s fiscal condition, particularly with respect to its ability to meet debt obligations. He acknowledged that the country was on track to repay its current debt by June 30, 2023, thus avoiding default in the ongoing fiscal year. However, he cautioned that the Pakistani authorities face a significant challenge with around $34 billion in debt repayments scheduled for the next fiscal year.

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According to Ismail, securing an IMF loan program by October or November is crucial to avert a potential default. He emphasized that IMF assistance is currently the only viable solution to address Pakistan’s weak fiscal conditions. Failure to enter into an agreement with the IMF would significantly increase the risk of default, posing substantial economic consequences for the country.

Regarding his political future, Miftah Ismail expressed his intention to align himself with former Prime Minister Shahid Khaqan Abbasi. He asserted that his affiliation would follow wherever Shahid Khaqan joins, indicating a potential shift in political alliances. Ismail clarified that the rumors surrounding his involvement in the National Assembly seat are baseless speculations. He confirmed that he has not received any official offer regarding the seat setup.

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Addressing the issue of government performance, Ismail highlighted a change in approach within the Muslim League. Initially, discussions regarding government performance were discouraged. However, he noted that the current stance on the matter has shifted to silence, indicating a potential shift in the political landscape.

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