Pakistan needs a new IMF deal, no matter who wins election

February 09, 2024 (MLN): The most critical thing for the new Pakistan government, be it a majority or a coalition, is negotiating a new bailout program with the International Monetary Fund, said Ruchir Desai, a fund manager at Asia Frontier Capital as reported by Bloomberg.

"Pakistan's external debt situation is still uncertain and unstable" and there are a lot of debt repayments coming up in the next six months, he said in an interview with Bloomberg Television.

"They need a new IMF program, which should be a longer duration program and also a much larger loan one".

Pakistan is "extremely cheap," trading near the lowest forward price-to-earnings ratio since the global financial crisis, so the "market is discounting slot of political and macroeconomic noise".

Interest rates may be reduced in the next nine to 12 months. To note, earlier in December 2023, Bloomberg reported that the State Bank of Pakistan (SBP) will likely slash a cumulative 700 basis points by the end of 2024.

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