{"id":62034,"date":"2024-02-19T17:23:20","date_gmt":"2024-02-19T17:23:20","guid":{"rendered":"https:\/\/news.pakistaninewspaperlist.com\/election-outcome-political-uncertainty-may-complicate-pakistans-new-imf-deal-fitch\/"},"modified":"2024-02-19T17:23:20","modified_gmt":"2024-02-19T17:23:20","slug":"election-outcome-political-uncertainty-may-complicate-pakistans-new-imf-deal-fitch","status":"publish","type":"post","link":"https:\/\/pakistaninewspaperlist.com\/news\/election-outcome-political-uncertainty-may-complicate-pakistans-new-imf-deal-fitch\/","title":{"rendered":"Election outcome, political uncertainty may complicate Pakistan\u2019s new IMF deal: Fitch"},"content":{"rendered":"<p><\/p>\n<div dir=\"auto\">\n<p>Global ratings agency Fitch on Monday warned that the \u201cclose outcome\u201d of the February 8 polls and the resulting \u201cnear-term political uncertainty\u201d may complicate Pakistan\u2019s efforts to secure a financing agreement with the International Monetary Fund (IMF).<\/p>\n<p>Nearly 60.6 million Pakistanis voted in the country\u2019s 12th general elections earlier this month amid a day-long suspension of cellular services and rigging allegations.<\/p>\n<p>However, the outcome of the polls resulted in a split mandate as PTI-backed independent candidates emerged at the top in the National Assembly elections.<\/p>\n<figure class=\"media  sm:w-1\/2  w-full  media--right  media--embed  media--uneven\">\n<p>    <iframe class=\"nk-iframe\" onload=\"setInterval(()=&gt;{try{this.style.height=this.contentWindow.document.body.scrollHeight+'px';}catch{}}, 100)\" width=\"100%\" frameborder=\"0\" scrolling=\"no\" style=\"height:400px;position:relative\" src=\"https:\/\/www.dawn.com\/news\/card\/1815390\" sandbox=\"allow-same-origin allow-scripts allow-popups allow-modals allow-forms\"><\/iframe><\/p>\n<\/figure>\n<p>Subsequently, the PPP and PML-N began <a href=\"https:\/\/www.dawn.com\/news\/1815367\">efforts<\/a> to hammer out some sort of power-sharing formula in the national and Punjab assemblies. On the other hand, the PTI has <a href=\"https:\/\/www.dawn.com\/news\/1815498\/pti-backed-independents-to-join-sunni-ittehad-council-barrister-gohar\">announced<\/a> an alliance with the Sunni Ittehad Council in the Centre, Khyber Pakhtunkhwa and Punjab.<\/p>\n<p>In a <a rel=\"noopener noreferrer\" target=\"_blank\" class=\"link--external\" href=\"https:\/\/www.fitchratings.com\/research\/sovereigns\/pakistan-election-outcome-highlights-risks-to-new-imf-deal-19-02-2024#:~:text=Fitch%20Ratings%2DHong%20Kong%2D19,March%202024%2C%20says%20Fitch%20Ratings\">report<\/a> released today, US-based Fitch Ratings \u2014 one of three leading global rating agencies \u2014 said a new IMF deal, to succeed the Stand-By Arrangement (SBA) expiring in March 2024, was key to Pakistan\u2019s credit profile.<\/p>\n<p>\u201c[\u2026] We assume one will be reached within a few months, but an extended negotiation or failure to secure it would increase external liquidity stress and raise the probability of default,\u201d it said.<\/p>\n<p>The rating agency highlighted that while Pakistan\u2019s external position had improved in recent months \u2014 with the State Bank of Pakistan reporting net foreign reserves of $8.0 billion as of Feb 9 \u2014 \u201cthis is low relative to projected external funding needs\u201d that are expected to exceed reserves for the next few years.<\/p>\n<p>\u201cWe estimate Pakistan met less than half of its USD18 billion funding plan in the first two quarters of the fiscal year ending June 2024 (FY24), excluding routine rollovers of bilateral debt,\u201d it said.<\/p>\n<p>Fitch further noted that the sovereign\u2019s vulnerable external position meant that securing financing from multilateral and bilateral partners would \u201cbe one of the most urgent issues on the agenda for the next government\u201d.<\/p>\n<p>\u201cThis looks set to be a coalition of the PML-N and PPP, despite the strong performance by candidates associated with Imran Khan\u2019s PTI in the election. Negotiating a successor deal to the SBA and adhering to the policy commitments under it will be critical to most other external financing flows, not just from the IMF, and will strongly influence the country\u2019s economic trajectory in the longer term,\u201d it stated.<\/p>\n<p>Fitch said that finalising a new IMF deal was likely to be challenging.<\/p>\n<p>\u201cThe current SBA is an interim package and we believe any successor arrangement would come with tougher conditions, which may be resisted by entrenched vested interests in Pakistan. Nonetheless, we assume any resistance will be overcome, given the acute nature of the country\u2019s economic challenges and the limited alternatives,\u201d it added.<\/p>\n<p>The rating agency further warned that continued political instability could prolong any discussion with the IMF, delay assistance from other multilateral and bilateral partners or hamper the implementation of reforms.<\/p>\n<p>\u201cWe believe a government will assume office and engage with the IMF relatively quickly, but risks to political stability are likely to remain high,\u201d it said, warning that public discontent could rise if the PTI remained sidelined.<\/p>\n<p>Moreover, Fitch said Pakistan\u2019s government had a \u201cpoor record\u201d of completing IMF programmes and highlighted that less than half of the South Asian country\u2019s 24 IMF programmes had disbursed over 75 per cent of the funding available.<\/p>\n<p>\u201cHowever, there has been fair progress on targets under the current SBA. Moreover, we perceive there is a stronger consensus within Pakistan on the need for reform, which could facilitate the implementation of a successor arrangement.\u201d<\/p>\n<p>The rating agency said that policy risks could rise over time if the external liquidity pressure eased.<\/p>\n<p>\u201cThis could lead to the renewed build-up of economic and external imbalances. We believe Pakistan\u2019s external finances will remain structurally weak until and unless it develops a private sector that can generate greater significantly more export income, attract FDI (foreign direct investment) or reduce import dependence,\u201d it added.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Global ratings agency Fitch on Monday warned that the \u201cclose outcome\u201d of the February 8 polls and the resulting \u201cnear-term political uncertainty\u201d may complicate Pakistan\u2019s efforts to secure a financing agreement with the International Monetary Fund (IMF). Nearly 60.6 million Pakistanis voted in the country\u2019s 12th general elections earlier this month amid a day-long suspension [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":62035,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/i.dawn.com\/large\/2024\/02\/19192918a2496eb.png?r=192926","fifu_image_alt":"","footnotes":""},"categories":[10],"tags":[],"class_list":["post-62034","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pakistan"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/posts\/62034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/comments?post=62034"}],"version-history":[{"count":0,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/posts\/62034\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/media\/62035"}],"wp:attachment":[{"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/media?parent=62034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/categories?post=62034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pakistaninewspaperlist.com\/news\/wp-json\/wp\/v2\/tags?post=62034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}