Pakistan PM invites Imran Khan’s party to resume talks, offers audit of 2024 elections

ISLAMABAD: The deputy commissioner’s office in the eastern Pakistani city of Lahore has denied permission to jailed ex-premier Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) to hold a rally tomorrow, Saturday, to mark the one-year anniversary of a general election the party says was rigged.

Khan last month called on his party’s leaders and supporters to mark Feb. 8 as a “Black Day” and hold protests across the country to protest alleged rigging in polls last year. The PTI also sought permission to hold a main gathering on the grounds of the iconic Minar-e-Pakistan monument in Lahore on Saturday. 

The national polls were marred by a countrywide shutdown of cellphone networks and delayed results, leading to widespread allegations of election manipulation by opposition parties like the PTI and the Jamaat-e-Islami (JI) headed by Hafiz Naeem-ur-Rehman. The caretaker government which oversaw the electoral exercise, and the Election Commission of Pakistan (ECP), deny the charges. The US House of Representatives and several European countries have called on Islamabad to open a probe into the allegations, a move that Pakistan has thus far rejected.

In a notification dated Feb. 6, the Lahore deputy commissioner said he would not grant PTI permission to hold a rally at Minar-e-Pakistan due to, among other reasons, security concerns and in view of important events that were scheduled to take place in Lahore in February, including the ICC Champions Trophy, an eight-team cricket tournament that will be first global competition held in Pakistan in 28 years.

“Deputy commissioner Lahore refused to grant permission to PTI to hold jalsa [rally] at Minar-e-Pakistan Lahore on Feb 8, which is otherwise a democratic right of any political party holding a peaceful rally,” the PTI said in a statement sent to media.

Zulfikar Bukahri, a PTI spokesman, said the denial was “not exactly a surprise.”

“There is no freedom of any sort left in Pakistan,” he told Arab News. 

In a separate text message to journalists, the PTI said it would hold a “massive” rally in Swabi in the northwestern Khyber Pakhtunkhwa province where the party is in power, calling on supporters from other parts of Pakistan to gather there. 

The party has held multiple rallies at the huge park surrounding the 70-meter tall monument since 2011. Many political parties in Pakistan’s history have used the Minar-e-Pakistan ground to hold protests and power shows. 

Khan’s PTI candidates contested the Feb. 8 elections as independents after the party was barred from the polls. They won the most seats but fell short of the majority needed to form a government, which was made by a smattering of rival political parties led by Prime Minister Shehbaz Sharif. The party, as well as the Jamaat-e-Islami and other opposition outfits, have alleged mass rigging in the polls, which authorities deny.

Khan himself has been jailed in a slew of cases since August 2023 which he says are politically motivated to keep him out of office.

ISLAMABAD: Pakistan has continued to make headway restoring economic stability and rebuilding external buffers, global credit rating agency Fitch said this week, but progress on difficult structural reforms would be key to upcoming IMF program reviews and continued financing from other multilateral and bilateral lenders.

In a note released on Thursday, Fitch said the State Bank of Pakistan’s decision to cut policy rates to 12% on Jan. 27 underscored recent progress in taming consumer price inflation, which fell to just over 2% year-on-year in January 2025, down from an average of nearly 24% in the fiscal year ended June 2024 (FY24). Rapid disinflation reflected fading base effects from earlier subsidy reforms and exchange rate stability, underpinned by a tight monetary policy stance, which in turn had subdued domestic demand and external financing needs.

“Economic activity, having absorbed tighter policy settings, is now benefiting from stability and falling interest rates,” Fitch said. “We expect real value added to expand by 3.0% in FY25. Growth in credit to the private sector turned positive in real terms in October 2024 for the first time since June 2022.”

However, the rating agency said it expected new bilateral capital flows to be increasingly commercial, and conditional on reforms. 

“Discussions on the partial sale of the government’s stake in a copper mine to a Saudi investor exemplify such commercial flows. Pakistan and Saudi Arabia also recently agreed on a deferred oil payment facility,” it added. 

Securing sufficient external financing remains a challenge for Pakistan, considering large maturities and lenders’ existing exposures. 

The authorities budgeted for about $6 billion of funding from multilaterals, including the IMF, in FY25, but about $4 billion of this will effectively refinance existing debt. A recently announced $20 billion 10-year framework with the World Bank Group appears broadly in line with this. The group’s current project portfolio is about $17 billion, and its net new yearly lending to Pakistan averaged around $1 billion over the past five years.

Strong remittance inflows, robust agricultural exports and tight policy settings have allowed Pakistan’s current account to move into a surplus of about $1.2 billion (over 0.5% of GDP) in the six months to December 2024, from a similarly sized deficit in FY24, Fitch noted. Foreign exchange market reforms in 2023 also facilitated the shift. 

“When upgrading Pakistan’s rating to ‘CCC+’ in July 2024, we expected a slight widening of the current-account deficit in FY25,” the agency added. 

Foreign reserves are set to outperform targets under Pakistan’s $7 billion IMF Extended Fund Facility (EFF) and Fitch’s earlier forecasts. Gross official reserves reached over $18.3 billion by end-2024, about three months of current external payments, up from around $15.5 billion in June.

Reserves remain low relative to funding needs, however. 

“Over $22 billion of public external debt matures in the whole of FY25. This includes nearly $13 billion in bilateral deposits, which we believe bilateral partners will roll over, as per their promises to the IMF. Saudi Arabia rolled over $3 billion in December, and the UAE $2 billion in January,” Fitch added. 

There has also been progress on fiscal reform, despite some setbacks. The primary fiscal surplus has outperformed IMF targets, although federal tax revenue grew less than required under the IMF’s indicative performance criterion in the first six months of FY25. All provinces have recently legislated higher agricultural income taxes, a key structural condition of the EFF, although delays mean that the program’s January 2025 implementation deadline for the reform was missed.

In July, Fitch noted that positive rating action could be driven by a sustained recovery in reserves and further significant easing of external financing risks, and/or implementation of fiscal consolidation in line with IMF commitments.

Meanwhile, deteriorating external liquidity, for example linked to delays in IMF reviews, could lead to negative action, the rating agency said.