Pakistan’s new government finds itself between the devil and the deep sea. If it accepts all recommendations of the IMF, it can trigger a flood of inflation. If, on the other hand, it defers the decision any further, it risks delaying the IMF loan, which can intensify economic deterioration. It is difficult to tell at this point which prong will cost the ruling coalition more in terms of political capital.
Economic uncertainty has deepened further with an unexpected delay in government’s talks with the International Monetary Fund (IMF) for the completion of the seventh review for the stalled Enhanced Fund Facility (EFF) program.
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