Is Pakistan poised for default in FY 2024?

[Communism]

It looks like it's true that the IMF is making sure that Pakistan defaults.


Every single propaganda vector from the U.S. is pushing for default.


I think China will keep giving backdoor funds to Pakistan throughout this whole process.


I have started nibbling on Pakistani Equities as they probably have bottomed here.

 

[PradoTLC]

May be IMF views $ Darr ‘s. Budget as reckless?

Budget concerns

The criticism wasn’t unexpected as most financial analysts had ruled out the Fund’s approval of the expansionary budget.

www.dawn.com

 

[Communism]

May be IMF views $ Darr ‘s. Budget as reckless?

Budget concerns

The criticism wasn’t unexpected as most financial analysts had ruled out the Fund’s approval of the expansionary budget.

www.dawn.com

The IMF has moved the goal posts so many times that it's obvious that they want Pakistan to default.


Also I have scanned alot of US Propaganda Vectors and pretty much all of them are pushing for a default.


I think China will keep Pakistan fiscally propped up as long as Pakistan keeps making IMF reforms, basically a pseudo IMF structural adjustment, lol.

 

[epebble]

The IMF has moved the goal posts so many times that it's obvious that they want Pakistan to default.


Also I have scanned alot of US Propaganda Vectors and pretty much all of them are pushing for a default.


I think China will keep Pakistan fiscally propped up as long as Pakistan keeps making IMF reforms, basically a pseudo IMF structural adjustment, lol.

IMF wants Pakistan to default so that debts to China will be exposed. They don't want to hold the bag for China.

 

[Communism]

IMF wants Pakistan to default so that debts to China will be exposed. They don't want to hold the bag for China.

IMF wants Pakistan to default so that the IMF can "restructure" the loans in a way that selectively defaults on China.


That's what they did in the other defaults so far.


It looks like China has caught onto it and is now basically forcing Pakistan to reform through the IMF process but not having it default.


There's no way that Pakistan would still be solvent for this long into the process without any fund dispersant if Pakistan isn't being backdoor propped up by China.


Pakistan went bankrupt at least 1 whole year ago, lol.

 

[epebble]

IMF wants Pakistan to default so that the IMF can "restructure" the loans in a way that selectively defaults on China.
That's what they did in the other defaults so far.

Yes, that is the 'new' IMF protocol for countries with secret China debt.

It looks like China has caught onto it and is now basically forcing Pakistan to reform through the IMF process but not having it default.

But it doesn't seem to be working.

There's no way that Pakistan would still be solvent for this long into the process without any fund dispersant if Pakistan isn't being backdoor propped up by China.
Pakistan went bankrupt at least 1 whole year ago, lol.

Unlikely. Any such transfer would have become public intentionally or unintentionally. I don't think Pakistan is secretive about its public finance. Dar's strategy has been to squeeze Pakistan's economy/citizens to stay afloat. It is like medieval bloodletting to cure diseases.

 

[Communism]

Yes, that is the 'new' IMF protocol for countries with secret China debt.

But it doesn't seem to be working.

Unlikely. Any such transfer would have become public intentionally or unintentionally. I don't think Pakistan is secretive about its public finance. Dar's strategy has been to squeeze Pakistan's economy/citizens to stay afloat. It is like medieval bloodletting to cure diseases.

It's pretty clear that a ton of reforms have already went through.


I am going to keep adding to my bet over time and let the market decide if I am right.


It's good that most people disagree with me, as that means the payout is much greater if/when I turn out to be correct.


Assuming Washington clowns don't steal my Pakistani Equities like they stole my Russian equities.

 

[epebble]

It's pretty clear that a ton of reforms have already went through.


I am going to keep adding to my bet over time and let the market decide if I am right.


It's good that most people disagree with me, as that means the payout is much greater if/when I turn out to be correct.


Assuming Washington clowns don't steal my Pakistani Equities like they stole my Russian equities.

So, your bet is that there won't be a sovereign default in, say, 12 months? It might be feasible if China rolls over all their debts, which seems logical, as they won't benefit from a default, and the government pays out any other external debt by squeezing the economy harder. It won't be a pretty sight, but not impossible.

 

[Muji.Iqbal]

I thought it was a conspiracy by Imran Khan against the Pakistani state? Isn't Imran Khan dictating the IMF to boycott the Pakistani state?



Every institute and nation is tired of generals and PDM. There is zero trust in a nation that owes money, but doesn't repay on time. A nation that keeps borrowing and begging endlessly.

Well at least there is China. We will wait and see.

 

[Communism]

So, your bet is that there won't be a sovereign default in, say, 12 months? It might be feasible if China rolls over all their debts, which seems logical, as they won't benefit from a default, and the government pays out any other external debt by squeezing the economy harder. It won't be a pretty sight, but not impossible.

I think if the civilian government makes significantly more progress with IMF reforms in their "pseudo structural adjustment", that China will play the role of IMF bailout.


If the IMF strings Pakistan along the whole time, I think Pakistan will selectively default on Western Commercial Debt/Loans at some point.


This is because the IMF is ultimately simply the clean-up crew for Western Commercial Lenders.


If they refuse to clean up for the Western Commercial Lenders, then the Western Commercial Lenders deserve to get taken to the cleaners.

 

[PradoTLC]

The IMF has moved the goal posts so many times that it's obvious that they want Pakistan to default.


Also I have scanned alot of US Propaganda Vectors and pretty much all of them are pushing for a default.


I think China will keep Pakistan fiscally propped up as long as Pakistan keeps making IMF reforms, basically a pseudo IMF structural adjustment, lol.

so IMF just wants to screw Pakistan.... ?.. really?

or may bcos $Darr is just a shameless liar that fudged numbers that caused Pakistan to suffer millions in $ of fines?..

 

[epebble]

I think if the civilian government makes significantly more progress with IMF reforms in their "pseudo structural adjustment", that China will play the role of IMF bailout.


If the IMF strings Pakistan along the whole time, I think Pakistan will selectively default on Western Commercial Debt/Loans at some point.


This is because the IMF is ultimately simply the clean-up crew for Western Commercial Lenders.


If they refuse to clean up for the Western Commercial Lenders, then the Western Commercial Lenders deserve to get taken to the cleaners.

If you see https://www.usip.org/publications/2023/04/pakistans-existential-economic-crisis#

Private Debt and Commercial Loans​ Pakistan holds a large amount of private debt; much of this is in the form of private bonds, such as Eurobonds and global Sukuk bonds, amounting to $7.8 billion. Some of this debt is recent: In the last fiscal year, Pakistan raised $2 billion by floating Eurobonds of 5, 10, and 30 years at an interest rate ranging from 6 percent for five years and 8.87 percent for 30 years. Pakistan holds foreign commercial loans to the tune of nearly $7 billion, which is likely to increase to nearly $9 billion by the end of the current fiscal year. Much of Pakistan’s commercial loan stock is owed to Chinese financial institutions, as Pakistan has repaid major non-Chinese commercial loans of institutions.

There isn't much Western commercial debt. So, default can only affect Eurobonds and Sukuk bonds. There is not much gained by defaulting Paris Club or Multilateral loans as they won't likely call out explicit default. That leaves only Chinese commercial loans in the crosshairs. If defaulted, that will be bad politics. Somehow, Chinese government has to swallow these bad debts. That partly explains the current cold relations between China and Pakistan. All that China wants desperately is not to see Pakistan country code on their Caller ID.

 

[PradoTLC]

good luck in getting money from China, KSA , UAE, Qatar.... you are hoping that they are as dumb as $ Darr tinpot supporters.

 

[Communism]

If you see https://www.usip.org/publications/2023/04/pakistans-existential-economic-crisis#

Private Debt and Commercial Loans​ Pakistan holds a large amount of private debt; much of this is in the form of private bonds, such as Eurobonds and global Sukuk bonds, amounting to $7.8 billion. Some of this debt is recent: In the last fiscal year, Pakistan raised $2 billion by floating Eurobonds of 5, 10, and 30 years at an interest rate ranging from 6 percent for five years and 8.87 percent for 30 years. Pakistan holds foreign commercial loans to the tune of nearly $7 billion, which is likely to increase to nearly $9 billion by the end of the current fiscal year. Much of Pakistan’s commercial loan stock is owed to Chinese financial institutions, as Pakistan has repaid major non-Chinese commercial loans of institutions.

There isn't much Western commercial debt. So, default can only affect Eurobonds and Sukuk bonds. There is not much gained by defaulting Paris Club or Multilateral loans as they won't likely call out explicit default. That leaves only Chinese commercial loans in the crosshairs. If defaulted, that will be bad politics. Somehow, Chinese government has to swallow these bad debts. That partly explains the current cold relations between China and Pakistan. All that China wants desperately is not to see Pakistan country code on their Caller ID.

That's even better.


It means that Pakistan can simply default on IMF, World Bank, and Asian Development Bank debt when the IMF gives them the cold shoulder.


IMF giving them the cold shoulder is the punishment, so they can do the crime for the punishment they already paid.

 

[epebble]

That's even better.


It means that Pakistan can simply default in IMF, World Bank, and Asian Development Bank debt when the IMF gives them the cold shoulder.

That is a really bad idea as that would simply cut off Pakistan from global financial system. You are looking at North Korea type situation. Multilateral institutions tend not to force sovereign default. They just try to rollover allowing soft default.