Pakistan will ‘absolutely not’ default despite catastrophic floods, says Miftah Ismail
Finance Minister Miftah Ismail said that, Pakistan will “absolutely not” default on debt obligations despite catastrophic floods in the country.
The Finance Minister also indicated that the implementation of reforms initiated to stabilize the troubled economy will not be stopped.
The floods have affected more than 30 million Pakistanis, causing billions of dollars in damage while killing more than 1,500 people, raising concerns that Pakistan will default on its debt.
Finance Minister Miftah Ismail while talking to the foreign news agency Reuters in his office said that the path to economic stability was difficult in the challenging situation and it has become more difficult after devastating floods in the country.
“But if we continue to make the wise, far-sighted decisions, we won’t be completely bankrupt,” he said
Pakistan was able to revive the International Monetary Fund (IMF) program after several months of delay due to tough policy decisions, but the positive attitude towards the country’s economic situation was short-lived before the devastating rains.
Miftah Ismail said that despite the devastation caused by the floods, most of the policies and targets related to economic stability, including increasing the dwindling foreign exchange reserves, are still on track.
State bank bank reserves stand at $8.6 billion, despite the influx of $1.12 billion in IMF funding in late August, which are only enough for about a month of imports. The end-year target was to increase the buffer up to 2.2 months.
He said that the current account deficit will not exceed $2 billion following the flood.