Pakistan’s inconclusive election increases default risk: Bloomberg

Political instability poses risk to country's negotiations for a new package from the IMF

In the recent election held on February 8, Pakistan faces increased political uncertainty that could affect its economic stability and efforts to secure critical financial support from the International Monetary Fund (IMF), as reported by Bloomberg Economics.

Without the essential support, Pakistan’s default risk could escalate, impacting the nation’s economic growth and prospects.

The election did not result in a clear majority for any party. Instead, independent candidates, many of whom are supporters of the jailed former Prime Minister Imran Khan, emerged as significant contenders, securing 101 of the 265 National Assembly seats contested.

This outcome has introduced complexities in forming a stable coalition government, raising concerns among investors and potentially delaying crucial investments in the country, states Bloomberg Economics.

The unexpected election results have intensified the political landscape, with Imran Khan’s influence notable despite his incarceration and the ban on his party’s participation.

The ongoing political instability poses a risk to Pakistan’s negotiations for a new aid package from the IMF.

The situation underscores the urgent need for political consensus to navigate the economic challenges ahead.




Monitoring Desk
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