Timely Pakistan Election Results Will Reduce Policy and Political Uncertainty: Moody’s

Moody’s Investors Services (Moody’s) stated that a timely announcement of the results, leading to a smooth formation of a new government will reduce policy and political uncertainty. Grace Lim, Analyst at Moody’s Investors Service in Singapore commenting on general elections in Pakistan stated that Pakistan held its national elections on 8 February. Counting is underway. A timely announcement of the results, leading to a smooth formation of a new government will reduce policy and political uncertainty. This is crucial for the country that is facing very challenging macroeconomic conditions, with a fragile balance of payments, weak growth, and high inflation. The newly elected government will also have to put in place a longer-term financing plan to meet its very large external debt obligations for the next few years. “We think that the government will need to negotiate for another IMF programme, after the current one expires in April 2024. Until a new program is agreed to, Pakistan’s ability to secure loans from other bilateral and multilateral partners will be severely constrained,” added the analyst. Even under a new IMF program, the new government will be tested on its willingness and ability to implement and sustain reforms, particularly revenue-raising measures, that may be politically unpopular, but required to improve macroeconomic conditions, the analyst added.