Pakistan’s upcoming election: Will the next government be able to achieve economic stability?

Islamabad, Pakistan Election

Islamabad, Pakistan – The Stakes of the Upcoming Elections

As Pakistan prepares to go to the polls on Thursday, the significance of this election cannot be overstated. The future of the country’s economy hangs in the balance, with nearly two years of political instability and a looming debt crisis at stake.

Former Prime Minister Imran Khan is currently in jail, and his party, Pakistan Tehreek-e-Insaf (PTI), is facing crackdowns from the authorities. On the other hand, the previously imprisoned and exiled former Prime Minister Nawaz Sharif is back in the running, along with candidates from various political ideologies.

With nearly 40 percent of the population living below the poverty line and inflation soaring, the need for a stable and effective government has never been more urgent for Pakistan’s 241 million people.

Last June, Pakistan was on the verge of default, with foreign reserves plummeting to $4.4bn and the currency losing more than 50 percent of its value against the US dollar. A bailout package from the International Monetary Fund (IMF) was secured just in time, but the country still faces significant economic challenges.

As the current IMF programme concludes in March, the winning party of the upcoming election will need to re-enter negotiations with the IMF to maintain economic stability. Economists have stressed the importance of making tough, anti-populist decisions to reduce expenses and balance the budget deficit.

Additionally, the impact of inflation over the past year and a half is another pressing issue for the incoming government. Protecting people from the side effects of stabilization policies and addressing the needs of the poor should be a top priority.

The new government will also need to outline a plan for the first 100 days, with an emphasis on expanding the tax net to improve the country’s tax-to-GDP ratio. Economic policies must steer away from a consumption-based growth model and prioritize long-term climate change mitigation and adaptation strategies.

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