Daily Times

KARACHI: The lead of the Pakistan Tehreek-e-Insaf (PTI) in the National Assembly (NA) seems to be well established by now, with its seat count likely to be between 110 and 120 (out of 272), as unofficial and incomplete results keep pouring in.

The party’s seat count is greater than the sum total of seats on which the following three following parties are leading: Pakistan Muslim League-N (PMLN), Pakistan Peoples Party (PPP) and Muttahida Qaumi Movement Pakistan (MQM-P). While most recent polls and surveys of public opinion were predicting a PTI win, the lead that the party has bagged has come a surprise, allaying concerns of a hung Parliament.

The party will be in a position to form the government in alliance with other political players like Pakistan Muslim League-Q (PML-Q), Grand Democratic Alliance (GDA), MQM-P or, the 10 to 15 independents.

The PTI’s economic agenda is divided into following cores: improvement of the taxation system, strengthening of the labour market, availability of low-cost housing, promotion of business-friendly policies, revival of manufacturing sector, transformation of the state owned enterprises (SOEs), tackling of the energy challenges, benefiting from CPEC projects, and enhancing access to finance.

“While PTI’s economic manifesto remains encouraging, we maintain that Pakistan will likely opt for the fresh programme of the International Monetary Fund (IMF) before the end of 2018. Thus, we believe that conditions imposed by the lender will take the centre stage in guiding policy making – some of these demands may include leaving Pakistani Rupee to market forces, furthering interest rate hikes, escalation in energy tariffs, significant curtailment in fiscal deficit, circular debt resolution, and privatisation of SOEs,” says a research report prepared by the Elixir Securities.

“Thus, we expect the momentum to continue as official election results pour in. This leg of the rally has the potential to pare the losses posted since the beginning of June 2018 and take benchmark KSE-100 to over 44,000 (+6 percent from last closing) in near term. However, one needs to keep in mind that political uncertainty was not the only factor to blame for the ongoing weakness in Pakistan equities,” says an analyst, commenting on the post-election economic situation.

The country continues to face economic challenges in the form of deteriorating external accounts which are likely to keep the Pak Rupee under pressure, and interest rates and inflation on upward trajectory – which combined are projected to slow down FY19 GDP growth to 5 percent (from 5.8 percent in FY18).

Published in Daily Times, July 27^th 2018.