Hong Kong May 5 2023: Pakistan faces a total of $3.7 billion of debt payments starling from this month, Fitch Ratings said, putting pressure on the government to quickly secure a bailout from the International Monetary Fund.
About $700 million of maturities are due in May and another $3 billion in June, Krisjanis Krustins, a Hong Kong-based director at Fitch, said in an ernalled response to questions Friday. Fitch expects $2.4 billion of deposits and loans from China will be rolled over.
Pakistan, which has been negotiating to restart a $6.5 billion bailout with the IMF for about half a year, is racing to avert a default as the nation’s reserves come under pressure. The country secured financing support from countries in the Middle East and China, a key IMF condition.
“Our base case is still that Pakistan and the INF will reach an agreement on the program review,” Krustins said. But the risks are large and the rating cut in February reflected that a default or debt restructuring is an increasingly real possibility, he added.
