Fitch forecasts the establishment of a technocratic government in Pakistan in the event of the removal of the PML-N administration.

The rating agency’s report on Pakistan forecasts that the coalition government led by PML-N would continue to hold power for the next 18 months, without any urgent intentions of conducting new elections.

The current administration will persist in executing the measures stipulated by the International Monetary Fund (IMF) to facilitate economic expansion.

Nevertheless, Fitch indicated that the political turmoil might potentially disrupt the economic operations in Pakistan, in addition to the consequences of climate change such as floods and droughts.

Based on the assessment of the rating agency, it is improbable that former prime minister Imran Khan will be released from jail in the immediate future, despite receiving some respite in some cases.

The agency forecasted that the upcoming general elections in Pakistan will take place in 2029.

Pakistan’s current account deficit is forecasted to stay at 1% in FY2024/25 on the economic front.

According to the Fitch assessment, it is anticipated that the State Bank of Pakistan (SBP) may decrease its primary policy rate from 22% to 16% in 2024.

Moody’s recently stated that Pakistan’s new staff-level deal with the International Monetary Fund (IMF) will enhance funding opportunities for the financially struggling South Asian country.

The administration led by Shehbaz Sharif and the International Monetary Fund (IMF) have successfully negotiated a three-year, $7 billion aid package agreement on Saturday, which will bring significant relief to the nation. This deal signifies a crucial milestone in the process of stabilizing Pakistan’s economy, which has been experiencing significant pressure.

Moody’s stated that the new IMF program would improve Pakistan’s (Caa3 stable) chances of obtaining funding. Moody’s has warned that Pakistan’s capacity to maintain reform implementation is vital for the country to consistently access financing for the whole term of the IMF program. This would help to reduce long-lasting liquidity issues for the government.

Moody’s also recognized possible difficulties, stating that societal tensions resulting from the expensive cost of living could hinder the execution of reforms, particularly in relation to increased taxes and future changes to energy rates.

“Furthermore, the agency added that there are concerns about the coalition government lacking a strong enough electoral mandate to consistently carry out challenging reforms.”