What will happen if Pakistan's external debt and liabilities soar more than $100 billion, and if Pakistan is not able to repay?

Economics Dec 15, 2020

Expert Solution

Pakistan, being a sovereign nation, borrows money from various financial institutions in the international market to meet its financing needs for infrastructure and other such spending. In case Pakistan's external debt and liabilities soar more than $100 billion, and if Pakistan is not able to repay it could do one of the following:

1. Negotiate a delayed repayment schedule with the creditors.

2. Seek the help of International Monetary Fund (IMF) for a bailout.

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