🤯 Picked by our AI, this stock rallied more than Nvidia this month, yielding 94% since MarchSee the stock

Pakistan in for 'roller coaster' ride after parties strike deal

Published 02/21/2024, 09:57 AM
Updated 02/21/2024, 10:01 AM
© Reuters. FILE PHOTO: Supporters of former Prime Minister Imran Khan's party, the Pakistan Tehreek-e-Insaf (PTI), chant slogans as they gather during a protest demanding free and fair results of the elections, outside the provincial election commission office in Ka

By Asif Shahzad and Ariba Shahid

ISLAMABAD (Reuters) - The deal between two Pakistani parties to form a coalition government will be based on conditional support from one of them, the Pakistan People's Party, that will review decisions on a case-by-case basis, a top PPP official said on Wednesday.

Such an arrangement could make life difficult for the government, which needs to take tough decisions to steer the country out of financial crisis facing a strong opposition bloc led by supporters of jailed former prime minister Imran Khan.

"It will be, of course, a roller coaster," said political commentator and author Ayesha Siddiqa of the road ahead for the next government.

The agreement between Bilawal Bhutto Zardari's PPP and the Pakistan Muslim League-Nawaz (PML-N) of three-time Premier Nawaz Sharif late Tuesday night ended days of uncertainty and negotiations after an inconclusive Feb. 8 election.

But the PPP is not taking cabinet positions, its secretary of information, Faisal Karim Kundi, told Reuters, and its support in parliament would depend on the party's stance.

"We will support policy decisions on an issue-to-issue basis," Kundi said, adding that PPP would vote for the PML-N's prime minister candidate, Shehbaz Sharif, younger brother of party chief Nawaz Sharif.

The most challenging task is to agree on critical fiscal tightening conditions under a new International Monetary Fund (IMF) programme.

The current IMF programme expires in March.

Other big moves include privatisation of loss-making state owned enterprises such as the flagship carrier Pakistan International Airlines (PIA).

Kundi said the PPP would not support the privatisation of the airline, while the PML-N would want to fast-track it.

In return for supporting the formation of government by PML-N, PPP will seek the offices of president, chairman of the upper house of the parliament, and governors in two of the four provinces, he said.

PML-N spokesperson Marriyum Auranzeb did not respond to a request for a comment.

Markets on Wednesday reacted positively to the news of an alliance, which removed days of uncertainty. Pakistan's benchmark share index rose 1.81%.

The index had fallen more than 5% since the elections.

Pakistan bonds recovered after three straight day of falls. The December 2027 bond was the biggest gainer, rising 2.58 cents, closely followed by the April 2031 bond which rose 2.54 cents.

© Reuters. FILE PHOTO: Supporters of former Prime Minister Imran Khan's party, the Pakistan Tehreek-e-Insaf (PTI), chant slogans as they gather during a protest demanding free and fair results of the elections, outside the provincial election commission office in Karachi, Pakistan February 17, 2024. REUTERS/Akhtar Soomro/File Photo

PML-N's 79 and the PPP's 54 seats together make a simple majority in parliament to form a government, which, however, will also rope in smaller parties in the coalition.

Candidates backed by Imran Khan won 93 seats, but do not have the numbers to form a government. He and his party have rejected the results of the elections, alleging widespread rigging.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.