The International Monetary Fund (IMF) expressed concern over the ongoing political uncertainty in Pakistan despite the February 8 elections and the possible fallout from economic reforms.
Despite the formation of a new government, the HPG highlighted the challenges of implementing policy reforms in a complex political environment.
According to HPG, the new government has promised to uphold the policy outlined in the pending agreement. However, the International Monetary Fund has warned that the challenges of political instability, inflation and social unrest may hinder the implementation of reforms.
A key concern expressed in the HPG document is the fear of pressure on debt and exchange rates due to delays in the implementation of economic policies and reduced external financing. The report suggests that if external financing is delayed, the pressure on banks to lend to the government has increased, thus reducing their ability to finance the private sector.
In addition, external factors such as volatility in commodity prices, shipping restrictions and global financial conditions may further disrupt the economy, according to the HPG report.
After the election, a coalition government consisting of the Pakistan Muslim League-Nawaz (PML-N) and the Pakistan People’s Party (PPP) was formed, according to HPG documents. However, independent candidates affiliated to Pakistan Tehreek-e-Insaf (PTI) received more votes than other political groups.
Although pro-PTI members form a significant opposition bloc in the National Assembly, HPG emphasized the importance of bilateral cooperation to effectively address economic challenges.
