Pakistan economy has been in dire straits for a long time. Pakistan has already defaulted as it is restructuring (Rollover) bilateral loans with China and KSA. It is just a matter of time before Pakistan decalres official bankruptcy. The currenct PDM govt. is trying to avoid default by hook or crook till September when elections are held. The new govt will be forced to declare bankrputcy and PDM can wash it's hands off the blame.
One strategy Pakistan has repeatedly used to avoid default is to use any contemporary crisis to beg temporary debt rescheduling on humanitarian basis. PTI found it's excuse from 2020-22 in the form of Covid, many payments were deferred which resulted in balooning foreign debt by $43 Billion. Yet, it gave IK the breathing space in economic front he was desperately looking for.
PDM used Indus Floods of 2022 to beg temporary respite in payments of foreign debts. No debts were written off but temporary relief in payment schedule of many bilateral and multilateral debts gave PDM an opportunity to provide temporary relief from inflation for a few months. Subsidised wheat and cheaper fuel/electricity charges went a long way in curbing inflation.
Things were looking extermely difficult till last week, with IMF taking a firm stance against Pakistan Govt.'s lack of economic structural reforms. No further loans by IMF and subsequently by KSA and China were clear signals for economic meltdown. But now we hear about the new Cyclone. Will Cyclone Biparjoy provide the temporary relief Ishaq Dar has been searching for? Will it cause enough destruction of man and material in Sindh and Balochistan for Sherry Rehman to cry crocodile tears over "Climate Change" and beg global donors to provide some cash/kind assistance as well as defer repayment of multilateral debts? If the cyclone causes enough damage PDM might be able to sail the boat to september and hand over the govt to PTI, which in turn would be forced to declare bankruptcy/default of Pakistan.