During the review period, the Tehreek-i-Insaf government that came to power in 2018 was ousted by a vote of no confidence in the parliament. The success of the vote could be attributed to the military establishment’s withdrawal of support for the government due to differences over the country’s future direction.
This political instability occurred within the context of an escalating economic crisis that brought Pakistan to the brink of default. Rising international commodity and fuel prices, high debt repayment levels, and lackluster economic performance have all contributed to a balance-of-payment crisis that has seen Pakistan’s foreign currency reserves dwindle.
Misguided policy decisions, such as subsidizing petrol and artificially boosting the value of the currency, further exacerbated the crisis. Meanwhile, the new government is negotiating a bailout with the IMF, while Pakistan also grapples with double-digit inflation and the impact of record flooding in 2022.
