04-09-2009, 05:58 AM
KARACHI: Growing political uncertainty and violence in Pakistan could hamper policymaking and hurt foreign investment, Moody’s Investors Service said Wednesday. In any case, foreign investment is expected to be weak because of the global crisis, Aninda Mitra, sovereign analyst at Moody’s Investors Service, told Dow Jones Newswires. But he noted that Pakistan has made progress in meeting the International Monetary Fund’s key performance criteria in the first review held in March. “The policy framework is responding to the IMF’s recommendations. However, political and business pressures for counter-cyclical policies are growing and social hardship remains high”, he said. Pakistan received $848 million on April 2 in the second installment of a $7.6 billion loan from the International Monetary Fund. It has so far received $3.9 billion under the 23-month standby facility. Last week, the World Bank gave Pakistan a $500 million interest-free loan. “From a sovereign ratings standpoint, we would like to see sustained progress in lowering inflation, market-based financing of the budget and retirement of treasury instruments from the State Bank of Pakistan and attainment of fiscal targets”, Mitra said. staff report
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