The Disposable Food Packaging Association (DFPA) has said that the new government will have to face challenges in securing consensus to pursue difficult but necessary reforms, including revenue raising measures. These views were expressed by DFPA President Ahsan Shahid, stating that this observation is unlikely to resonate with domestic political and economic pundits for one simple reason: the Special Investment Facilitation Council staffed by federal and provincial members of the executive and senior most civilian and military personnel has shown ample capacity to deliver on all politically challenging pledges to the International Monetary Fund under the ongoing Strand-By Arrangement – a capacity that may overtly be seen as decisions that have been taken by the caretaker cabinet but without the full support of SIFC members such decisions would not have been possible. Ahsan Shahid said that Moody’s conclusion that overall uncertainty around Pakistan’s ability to quickly negotiate a new IMF program after the current one expires in April 2024 remains very high has been a mitigating factor in securing an IMF program loan in the past, before SIFC was established in late June 2023. However, one would have to agree with Moody’s observations that there is “uncertainty around the extent of public protests because they may challenge the legitimacy of the new government. Social tensions may increase which would likely constrain the government’s ability to undertake reforms.” DFPA President said that there is no doubt that sustained high rates of inflation, hovering around 30 percent per month during the past year and a half have been fueled by: (i) an inexplicable massive rise in domestic borrowing by the caretakers (not part of the IMF condition) as well as by the 16-month-long Shahbaz Sharif-led government that crowded out private sector borrowing with a consequent negative impact on private sector borrowing and domestic output leading to factory closures and unemployment; and the (ii) administrative measures to meet the IMF-stipulated objective of full-cost recovery and the recent rise in gas prices is a component of that pledge to the IMF. Simmering public discontent with poverty levels as high as 40 percent was already evident pre-elections, discontent that was not backed by any political party, however in the event that protests become more organized under a political banner then one may be compelled to heed warnings by Moody’s. It may be recalled that former Finance Minister Ishaq Dar challenged Moody’s rating downgrade on 6 October 2022, the same day he announced an unbudgeted 110 billion rupees subsidy for exporters, in violation of the then ongoing IMF program. Ahsan Shahid noted that neither Moody’s nor the other two international rating agencies – Fitch and Standard and Poor’s – have upgraded Pakistan’s rating since then which, in turn, is the reason why the 6.1 billion dollars budgeted by Dar for the ongoing year under the head of borrowing from external commercial banks and through incurring debt equity (issuance of Sukuk) has not materialized to-date. The successful first review staff level agreement reached on 15 November, claimed by the caretaker finance minister as an accomplishment, was not followed by any upgrade by the rating agencies, as used to be the case in the past.