The upcoming election in Pakistan is of immense importance due to the economic challenges facing the country. With nearly 40 percent of the population living below the poverty line and inflation at over 30 percent, the need for a stable government to address these issues is critical.
The country’s recent economic history includes entering an IMF bailout programme in 2019 and facing challenges due to political decisions that violated IMF requirements. The urgency for the incoming government, regardless of political affiliation, to engage with the IMF and prioritize economic decisions is stressed by economists.
The impact of inflation on the economy and the need to protect people from the effects of stabilisation policies is also emphasized. The government’s plan for the first 100 days should focus on expanding the tax net and moving away from a consumption-based growth model.
Furthermore, the looming debt payment crisis and the need to negotiate with lenders to restructure debt or offer equity in Pakistani assets is highlighted. Additionally, investment in climate mitigation and adaptation strategies is crucial to address the challenges and effects of climate change.
The stakes are high in this election, and the winning party’s first order of business must be to re-enter negotiations with the IMF to maintain economic stability and address the country’s economic challenges.