Why Pakistan is Going to Default?

Pakistan is presently experiencing a serious economic crisis, and defaulting on its debt is very likely. This is due to several factors, including 1. High levels of national debt: Pakistan's public debt is considerable and presently exceeds 80% of its GDP. This significant amount of debt has accrued over time as a result of several issues, including excessive military spending, poor tax collection, and a lack of financial restraint. 2. Low foreign exchange reserves: In recent years, Pakistan's foreign exchange reserves have been quickly declining and are currently at a very low level. This has increased the possibility of default and made it more challenging for the nation to pay its debts and pay for imports. 3. Crisis in the balance of payments: Pakistan is now experiencing a crisis in the balance of payments, which has been brought on by several causes including a significant trade imbalance, a lack of foreign investment, and a fall in remittances from abroad workers. 4. Political unrest: Pakistan's political unrest has exacerbated the country's economic difficulties. The nation has a history of poor governance, and the present administration has failed to carry out the essential economic changes to make things more stable. 5. COVID-19: An extraordinary economic crisis brought on by the epidemic has had a significant negative influence on Pakistan's economy. The nation has a huge trade imbalance and a severe lack of foreign cash. Pakistan will need to move quickly to solve these challenges to avoid default. This will probably include carrying out a set of structural and economic changes, including lowering government expenditure, raising tax revenue, and enhancing the business climate. The nation will probably also require financial support from international bodies like the International Monetary Fund. It is significant to remember that there are no simple answers to Pakistan's complicated economic and financial problems. However, the economy may be stabilized and default avoided with the appropriate measures and policies