The two traditionally dominant players of Pakistani civilian politics declared this week that they planned to form a coalition government, ending the deadlock that followed last week's parliamentary election, where no party won a clear majority.  

The Pakistan Muslim League-Nawaz (PML-N) of former three-time Prime Minister Nawaz Sharif said it was joining forces with the Pakistan People's Party (PPP) as well as other smaller parties. 

Together, the parties would have enough seats to command a majority in the 265-member parliament.

The PML-N has nominated former Prime Minister Shehbaz Sharif, Nawaz Sharif's younger brother, to lead the new government.

The newly declared coalition echoes the 2022 alliance that ousted then Prime Minister Imran Khan's government and governed the country for 16 months before a caretaker administration took over to hold elections.

A weak and unstable administration?

"This new coalition government is likely to be weak and unstable, given that disagreements might emerge between the PML-N and PPP. It is also likely to be deferential to the army, as it was during its first tenure," said Madiha Afzal, a fellow at the Brookings Institution.

"It presided over both a deteriorating security situation and an acute economic crisis for 16 months, which does not induce confidence for its next stint in power."

The PPP has also said it won't take ministerial roles this time round and will back the prime minister "on an issue-to-issue basis," raising fears that this coalition would be weaker than the last.

If the PPP doesn't take any ministries, analysts say the administration will effectively be a minority government, at a time when it will have its work cut out amid grave challenges ranging from an acute economic crisis to political instability and rising militancy.

Pakistan's economic woes

Pakistan has been in a state of economic turmoil in recent years.

Corruption, mismanagement, the COVID-19 pandemic, a global energy crisis, and natural disasters have all taken a heavy toll on the economy.

Many Pakistanis have seen a sharp decline in their real wages.

The nation's poor, in particular, are bearing the brunt of the soaring cost of essential items, with many rendered incapable of buying even basic food items and paying electricity bills.

Pakistan struck a $3 billion standby deal with the International Monetary Fundlast year to tackle ballooning foreign debt and bridge the widening balance-of-payments gap.

While the deal provided much-needed relief, the new administration will now have to engage in talks with the global lender over its extension, which will likely require Pakistan to agree to further belt-tightening measures.

"This is a very difficult time in Pakistan's economic history. The elected government will be compelled to make unpopular choices to qualify for a new IMF loan," Farhan Bokhari, an economic analyst, told DW. 

"And those decisions will bring the risk of public discontent in the near future. There's going to be no honeymoon period for the incoming government."

But Ahsan Iqbal, a PML-N leader and former minister, expressed confidence that the new government would fix the economy and bring stability. 

The last 16 months of the previous coalition government is a testimony that we have saved the country from default and put the economy on the path of stability," he told DW.

Can the government deliver?

But not everyone is optimistic.

"This coalition will lack the political space to implement reforms, and it will institute just enough austerity measures to meet IMF obligations for a new loan," said Michael Kugelman, South Asia director at the Wilson Center.

"The main focus will be on attracting more investment and fresh bailout funds. The army will want to see more progress toward reforms, while also pursuing investment through new mechanisms like the SIFC [Special Investment Facilitation Council], but the political realities will make this difficult," he added.

Maliha Lodhi, Pakistan's former representative to the United Nations, shares a similar view.

"The most consequential test for the government will be on the economy. It is unclear whether it will be able to muster the support of its allies to take the tough but unpopular decisions to take the economy out of the critical ward," she said.

"It remains an open question how it will manage parliament in which Imran Khan's party members will constitute a large bloc."

Khan is currently in jail over corruption and criminal charges and his Tehreek-e-Insaf (PTI) party was barred from contesting elections, forcing members to stand as independents.

But in a sign of the former prime minister's enduring popularity, the independent candidates performed unexpectedly well in the polls, emerging as the largest single group in parliament, with 93 lawmakers.

The PTI also claimed that there was widespread vote-rigging on election day to prevent it from winning a majority of seats in parliament. The party called for countrywide protests.

Kugelman said the new coalition was unlikely to give much attention to the rigging allegations, and it probably won't face much pressure from the West to conduct an investigation.

"But the cost of inaction could be street mobilizations and a new anti-government movement led by a PTI emboldened by its electoral performance but enraged by what it believes to be massive rigging that prevented it from securing a majority."

Rising militancy

Economic turmoil and political instability aside, Pakistan also faces a deteriorating security situation, with a surge in attacks by outfits such as the Tehreek-e-Taliban Pakistan (TTP) and the so-called Islamic State, particularly in the provinces of Khyber Pakhtunkhwa and Balochistan.

Cross-border tensions with Iran and Afghanistan have also been on the rise.

Lodhi said the new government would have to work closely with Pakistan's powerful military establishment "to deal with the surge in terrorist activity" and other security challenges.

Kugelman underlined that addressing the security situation would depend on the efforts of the military. "But prospects for success will be highest if there is a strong consensus between the civilian and military leadership," he noted.

"That consensus is likely to be there, at least initially. But if the goal is to build broader public support for a potential new major counter-terrorism operation, that may be tough given that this new government is unlikely to be terribly popular."

Edited by: Srinivas Mazumdaru