Faced with a financial crunch and its currency at its lowest, Pakistan's government has said it will not default on debt repayments, which are to the tune of $500 million.

Finance ministry chief Shaukat Tareen, a former banker who was recently appointed adviser to the Prime Minister Yousuf Raza Gilani on finance, told a news conference in Washington that only the next 12 to 18 months were problematic for Pakistan. He expressed confidence that the country's financial health would be restored.

Tareen stressed that Pakistan will not default on debt repayments that are not due until next year.

"Over my dead body," he said when pressed on the point of Pakistan going bankrupt and defaulting on debt repayments.

Tareen, now in the US to lobby for economic aid for Pakistan, gave an upbeat account of his meetings with finance ministers from different countries and heads of international financial institutions, the Daily Times reported.

He said fiscal deficit will be brought down to 4.3 per cent from 7.4 per cent. The trade and current account gap will be closed as the economy settles down and financial inflows resume.

The $1.64 billion pledged by the World Bank will be made up of $800 million for balance of payments support and $600 million for projects. Balance of payments support funds will be "front-loaded" in the next two months, he said.

Tareen said the next meeting of the Friends of Pakistan forum, to be held in Abu Dhabi in November, will be a "pledging conference." Saudi Arabia will also join the forum.