Sharif’s ousting will weaken PML-N’s chances of winning the election in 2018. The party is Pakistan’s most investment-friendly and pro-business party, according to Ali.
“Since it came to power in 2013, Pakistan’s key economic indicators have gradually improved due to better economic management while foreign investment has slowly picked up”, Ali said.
Pakistan’s all-share stock exchange fell sharply on the news, falling by 1.6 percent, but bounced back to finish up 44 points on Friday.
The country’s currency is also vulnerable, according to Daniel Salter.
“The Pakistani rupee has been vulnerable in recent months, overvalued on our REER (real effective exchange rate) metric. The currency had a mini sell off in early July which was quickly reversed and the central bank governor replaced,” he said.
“The current account has been worsening, FX reserves falling and exports contracting. We had assumed the government would keep the currency supported and allow weakening post-election.”
The Supreme Court ruling has increased uncertainty ahead of Pakistan’s next election, Salter cautions.
