Strategy for Avoiding Default Chart 13.2: Consequences of Move towards Default WORSENING RESERVES POSITION LIKELY DEFAULT IN EXTERNAL DEBT PAYMENTS SEVERE IMPORT COMPRESSION LOWER EXPORTS REDUCTION IN SUPPLIES EXCHANGE RATE DEPRECIATION HIGHER EXPORTS INTEREST RATE ESCALATION HIGHER FINANCIAL COST AMBIGUOUS IMPACT ON EXPORTS LOWER CONSUMPTION LOWER INVESTMENT NEGATIVE GDP GROWTH HIGHER RATE OF INFLATION IMPACT ON EMPLOYMENT& POVERTY 107