Pakistan: Will general elections be held in October 2023?

Besides facing dire economic challenges, Pakistan has been passing through a political crisis as well. The political quagmire has exacerbated. Investors’ confidence already shattered amid fears of default on foreign loans, has been battered further by uncertainties hovering over the elections schedule. This raises the million dollar question will the Elections be held in 2023.

The Elections for the National Assembly have become due by October 2023 as per the constitution. The dissolution of two Provincial Assemblies ahead of the October schedule and the judicial orders to hold early elections makes the situation untenable.

According to Polls conducted by Pakistan’s leading brokerage house, Topline Securities, 60-70% respondents feel elections will be held before October or in October 2023, while 20-30% think it will be delayed.

If National Elections are held around October 2023, there is high probability that Khan led PTI may get highest seats in National Assembly, surveys and polls forecast, unless Khan meets with disqualification, party breakup, etc. due to under trial cases against him.

With risk that present prime minister, Shehbaz Sharif may be disqualified by Supreme Court on contempt, another much talked about scenario has been that the present coalition government (PDM) might get its office term extended beyond October 2023. The government might invoke the Article 232 of the constitution under the garb of ‘emergency’ in the country on the pretext of security concerns or/and financial crisis.

Hypothetically, if the government undertakes such measures, matter might be challenged by the opposition in the court of law and the court may give its ruling over the government decision. It could linger the matter further and crisis may persist persist.

Another option could be the military rule. The country has witnessed direct military rule for 33 out of 75 years in Pakistan. Chances of direct military rule are slim, 10% as per our Poll.

To cool down the situation efforts of dialogue between political parties to sort out this elections related matter has started. This out of the court settlement, through dialogues can be a catalyst to cooling political heat and lead to any decision regarding the Elections for the national and provincial assemblies.

The brokerage house believes, this uncertain political theatre would keep on reflecting on the stock market, economy and currency. However, once the truce is carved the current political battles, the focus will be imminently back on economy.

The brokerage house in one of its earlier reports “Pakistan’s Debt Restructuring” dated December 03, 2022 and report “Pakistan Debt Restructuring – Part 2” dated January 24, 2023 the crucial factor or the Achilles heel of the current debt is the short term rollovers that have increased by 9 times to over US$12 billion since 2015.

The brokerage house is of the view that external debt restructuring is the litmus test, the mode of restructuring, and how orderly or disorderly are done, will determine Pakistan’s economic vulnerabilities.

Pakistan new government should ideally try to convert its short-term external loans with long term with the help of friendly countries like China, Saudi Arabia and UAE etc. If that is not doable, then Pakistan should try G-20 common framework of debt restructuring. These are less painful and will help in economic recovery.