KARACHI: Pakistani political analysts on Thursday said that despite rifts between key ruling coalition members Pakistan Peoples Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N) on policy issues and allocation of resources, there was no threat to Prime Minister Shehbaz Sharif’s government.
The PML-N and the PPP emerged as the two largest political parties in parliament after Pakistan’s contentious February 2024 election. The PPP helped Sharif get elected as Pakistan’s prime minister for a second time and settled for the presidency and the governorship in Punjab and Khyber Pakhtunkhwa (KP) provinces, areas where it performed poorly in the national polls.
The PPP, however, has recently voiced its displeasure with the Sharif-led government on various issues. The party has expressed reservations over government-proposed canals in the Indus River that it believes would reduce water supply to the southern Sindh province, where it remains in power. Sindh Chief Minister Murad Ali Shah this week penned a letter to Sharif, protesting against the National Highway Authority’s (NHA) allocation of inadequate funds for Sindh.
However, political analysts brushed aside concerns the PPP would play a part in toppling the federal government.
“As for leaving the government, that question does not arise as everything happening in the country right now is part of a political arrangement, and this arrangement is intended to move forward,” Salman Ghani, a Lahore-based political analyst, told Arab News.
Ghani said that the PPP initially believed that the PML-N would struggle to manage the country’s economic crisis. However, he said the situation had reversed with visible signs of economic recovery. The PPP’s complaints stem from fears that continued gains by the PML-N could leave the party with no future prospects, he said.
“PPP’s reservations seem more related to political survival than a genuine desire to leave the coalition,” Ghani noted. “In fact, whenever PPP raises issues within the high-level government committees, their demands are met.”
Mazhar Abbas, a Karachi-based political analyst, agreed with Ghani. He said that while differences persist, they are unlikely to cause the coalition to collapse, unless Pakistan’s powerful military decided that the PPP should part ways with the government.
“The PPP will not leave unless the [military] establishment decides that it’s the time for the current regime to go,” he said.
Pakistan’s military, which has directly ruled the country for over 30 years and is believed to wield massive influence indirectly, strongly denies allegations it interferes in political matters.
‘EVERYONE WILL LOSE’
Nadir Nabeel Gabol, a Sindh government spokesperson, warned PPP had the power to oust the federal government if its grievances, especially those related to allocation of resources, were not addressed.
“If this attitude persists, I do not see this federal government surviving much longer,” Gabol told Arab News, noting that PPP had helped topple former prime minister Imran Khan’s coalition government in 2022.
He said the PPP would “consider all options” if the federal government keeps sidelining it.
Senator Dr. Afnan Ullah Khan of the PML-N said the federal government was committed to addressing the PPP’s concerns. He acknowledged that if the PPP withdrew its support, the coalition government would collapse.
“We do not have the numbers without them,” he admitted.
He said tensions between the two allies would not escalate to that point, given the recent economic gains by the coalition government.
“If we maintain stability and the IMF program continues smoothly, the economy can stay on track,” he said. “But if instability sets in, everyone will lose.”
Gabol also expressed hope that the rift would be resolved.
“The Pakistan People’s Party hopes it does not come to that,” he said, referring to the party’s possible withdrawal of support in parliament. “The Sindh government hopes that its grievances will be addressed and that democracy will take its course, as it always does.”
Analysts say no threat to Pakistan ruling coalition despite rifts between key members PPP, PML-N
https://arab.news/by733
Analysts say no threat to Pakistan ruling coalition despite rifts between key members PPP, PML-N
- PPP has reservations over government-proposed canals in Indus River, alleged lack of funds for Sindh
- Ruling party senator admits PPP’s withdrawal of support would trigger coalition government’s collapse
IMF warns against policy slippage amid weak recovery as it clears $1.2 billion for Pakistan
- Pakistan rebuilt reserves, cut its deficit and slowed inflation sharply over the past one year
- Fund says climate shocks, energy debt, stalled reforms threaten stability despite recent gains
ISLAMABAD: Pakistan’s economic recovery remains fragile despite a year of painful stabilization measures that helped pull the country back from the brink of default, the International Monetary Fund (IMF) warned on Thursday, after it approved a fresh $1.2 billion disbursement under its ongoing loan program.
The approval covers the second review of Pakistan’s Extended Fund Facility (EFF) and the first review of its climate-focused Resilience and Sustainability Facility (RSF), bringing total disbursements since last year to about $3.3 billion.
Pakistan entered the IMF program in September 2024 after years of weak revenues, soaring fiscal deficits, import controls, currency depletion and repeated climate shocks left the economy close to external default. A smaller stopgap arrangement earlier that year helped avert immediate default, but the current 37-month program was designed to restore macroeconomic stability through strict monetary tightening, currency adjustments, subsidy rationalization and aggressive revenue measures.
The IMF’s new review shows that Pakistan has delivered significant gains since then. Growth recovered to 3 percent last year after shrinking the year before. Inflation fell from over 23 percent to low single digits before rising again after this year’s floods. The current account posted its first surplus in 14 years, helped by stronger remittances and a sharp reduction in imports. And the government delivered a primary budget surplus of 1.3 percent of GDP, a key program requirement. Foreign exchange reserves, which had dropped dangerously low in 2023, rose from US$9.4 billion to US$14.5 billion by June.
“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said in a statement after the Board meeting.
But he warned that Islamabad must “maintain prudent policies” and accelerate reforms needed for private-sector-led and sustainable growth.
The Fund noted that the 2025 monsoon floods, affecting nearly seven million people, damaging housing, livestock and key crops, and displacing more than four million, have set back the recovery. The IMF now expects GDP growth in FY26 to be slightly lower and forecasts inflation to rise to 8–10 percent in the coming months as food prices adjust.
The review warns Pakistan against relaxing monetary or fiscal discipline prematurely. It urges the State Bank to keep policy “appropriately tight,” allow exchange-rate flexibility and improve communication. Islamabad must also continue raising revenues, broadening the tax base and protecting social spending, the Fund said.
Despite the progress, Pakistan’s structural weaknesses remain severe.
Power-sector circular debt stands at about $5.7 billion, and gas-sector arrears have climbed to $11.3 billion despite tariff adjustments. Reform of state-owned enterprises has slowed, including delays in privatizing loss-making electricity distributors and Pakistan International Airlines. Key governance and anti-corruption reforms have also been pushed back.
The IMF welcomed Pakistan’s expansion of its flagship Benazir Income Support Program, which raises cash transfers for low-income families and expands coverage, saying social protection is essential as climate shocks intensify. But it warned that high public debt, about 72 percent of GDP, thin external buffers and climate exposure leave the country vulnerable if reform momentum weakens.
The Fund said Pakistan’s challenge now is to convert short-term stabilization into sustained recovery after years of economic volatility, with its ability to maintain discipline, rather than the size of external financing alone, determining the durability of its gains.
