Negotiations on a new government in Pakistan have allayed immediate fears of instability in the nuclear-armed nation following inconclusive elections last week, but the risk of a full-scale economic crisis remains. A $3 billion programme from the International Monetary Fund (IMF) runs out next month and securing a new and much bigger one is widely seen as the priority for the new administration. The largest party, the Pakistan Muslim League-Nawaz (PML-N), secured support on Tuesday from the second biggest, the Pakistan People's Party (PPP), and is trying to persuade it to form a majority coalition.
The possibility of a political stalemate in Pakistan leading to delays in both reforms and crucial foreign funding has sparked a selloff in its international bonds and fuelled analysts' fears of further economic misery for the country. Results coming in from Thursday's election saw an unexpectedly strong showing for independents - mostly supporters of jailed former prime minister Imran Khan - trailed by former prime minister Nawaz Sharif's Pakistan Muslim League-Nawaz (PML-N) and the Pakistan People's Party of Bilawal Bhutto Zardari. Sharif has already claimed victory, but his party remains far short of the necessary number of seats to form a government on its own.