ISLAMABAD: Political tensions ahead of the upcoming elections may weigh on policy decisions and reform implementation, says the International Monetary Fund (IMF).

The Fund in its latest report, First review under the Stand By-Arrangement, stated that the caretaker government in place until elections are held in February 2024 has managed to maintain economic stability on the back of decisive policy efforts. The National Assembly was dissolved on August 9, 2023, and the Election Commission has announced that the elections will take place on February 8, 2024.

Although controversial initially, as it went beyond the constitutional 90-day limit from the dissolution of parliament, the Election Commission argued that the extension was needed to redraw constituency boundaries after the outgoing government’s decision to base elections on the new 2023 Census. In the meantime, the caretaker government has made decisive efforts to ease financial pressures, and maintain stability in this interim period.

The report noted that given the approaching parliamentary elections, and as at the time ahead of Board approval of the authorities’ SBA request in July, IMF staff has met with representatives of Pakistan’s major political parties—Pakistan Muslim League-Nawaz, Pakistan People’s Party, and Pakistan Tehreek Insaf—to seek confirmation of their support for the program. The first two parties expressed written support for the SBA’s key objectives and policies. They also recognised the role that the SBA will play in preserving macroeconomic stability by anchoring policies and supporting external financing over the coming months. The third party that had also supported the SBA in July issued a statement noting the importance of free and fair elections to the successful implementation of the Fund-supported programme.—TAHIR AMIN