Post-poll turmoil may worsen Pakistan’s economic woes

Significance

The elections, resulting in a fractured mandate and marred by allegations of rigging, have increased polarisation. Separately, Pakistan’s nine-month, roughly USD3bn Stand-By Arrangement (SBA) with the IMF will soon expire. The IMF Executive Board approved the deal last July, mitigating the risk of a sovereign debt default.

Impacts

• Pakistan will look for US support in its negotiations with the IMF.
• Leading partner China will remain an important source of foreign direct investment.
• The military-security establishment will not withdraw from politics despite accusations that it interfered in the elections.