When IK took office, Pakistan was on the verge of sovereign default. What is this and why it happened?
1. Current account deficit ( Export + Remittance - Imports ) : 19 Billion Dollars
2. Foreign debt payments : 8 Billion Dollars
1. Current account deficit ( Export + Remittance - Imports ) : 19 Billion Dollars
2. Foreign debt payments : 8 Billion Dollars
We had 8.4 Billion $ forex reserves to pay for $ 27 Billion ( $19 CAD + $8 Debt ) on external account payments for fiscal year 18-19. This means that we didn't have enough money to pay for our imports and debt repayment. Such a situation is called default.
Pakistan was forced to ask for an IMF bailout as it was about to default on its payments. THIS IS WHAT OUR CRISIS WAS
