The South Asian nation will seek to negotiate an Extended Fund Facility with the IMF, the official said, asking not to be identified as the discussions are private. Talks with the Washington-based lender are expected to start in March or April, the person said.
Problematic is the fact that nuclear-armed Pakistan with a population of nearly 230 million may be unable to meet its external debt obligations - which will trigger a sovereign default
Pakistan needs to repay a whopping USD 77.5 billion in external debt from April 2023 to June 2026 and the cash-strapped country may face “disruptive effects” if it ultimately defaults, a prominent US think tank has warned. Pakistan is facing the risk of a default due to its massive external debt obligations. Pakistan, currently tackling a major economic crisis, is grappling with high external debt, a weak local currency and dwindling foreign exchange reserves.