Abstract

This paper provides an analysis of Pakistan's default risk, including an overview of the current economic situation and factors contributing to the risk. The statistics and data on Pakistan's perceived default risk, such as credit-default swap (CDS) rates, are discussed. The analysis also includes an examination of Pakistan's ability to meet foreign debt obligations. The paper also examines past cases of default risk in Pakistan and possible solutions for mitigating future risks. The paper suggests that the country's default risk is currently high due to political instability, delays in IMF talks, weak foreign exchange reserves, and a lack of fiscal discipline and transparency in public spending. However, the paper also suggests that there are steps that can be taken to mitigate this risk, such as negotiating a bailout package with the IMF, implementing fiscal discipline and transparency measures, building stronger foreign exchange reserves, and encouraging foreign investment.

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