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HomeThink-TanksPakistanPakistan is on the brink of default, reveals US think tank

Pakistan is on the brink of default, reveals US think tank


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A Washington-based think-tank, the United States Institute of Peace, has revealed that Pakistan is literally on the brink of economic default and that any small mistake could land it in dire straits.

The USIP report highlights some key factors that must be considered if the authorities want to pull Pakistan out of the economic abyss.

Pakistan has $126.3 billion worth of external debt and liabilities – as of December 2022 – of which about 7 percent of the $97.5 billion will go directly to the government’s various creditors. Meanwhile an additional $7.9 billion is held by government-controlled public sector enterprises with multilateral lenders.

The US think tank further said that Pakistan will have to pay off $77.5 billion in external debt from April 2023 to June 2026, which makes it look very difficult compared to Pakistan’s current economic situation.

It should be noted that major payments will be made to Chinese financial institutions, private lenders and Saudi Arabia over the next three years.


The main payments are due in June when $1 billion in Chinese safe deposits and about $1.4 billion in Chinese commercial debt mature. Which will further increase the difficulties of Pakistan.


The government, which came into being after a no-confidence motion in parliament a year ago, hopes to convince the Chinese to refinance and roll over both loans, something the Chinese government and commercial banks have done in the past.


On the other hand, Gallup, the main research organization in Pakistan, has revealed that the government’s impotence in the face of continuous instability and political chaos has severely damaged public confidence.

It has been said in the survey that the confidence of the Pakistani people in the government is constantly weakening. The reason for this is the incomplete and weak confidence of the people in power

Former Prime Minister Imran Khan had expressed these concerns a year ago, but unfortunately no attention was drawn to it.

News Desk, where most of the News Item edit for THE THINK TANK JOURNAL

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