Turmoil could affect Pakistan economic growth: S

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New Delhi, Nov 27 (UNI) Without hazarding outcome of current turmoil in Pakistan, an international rating agency today said the country might suffer fiscal slippages which could jeopardize its currently favourbale debt trajectory.

In a report on Pakistan, Standard&Poor's credit analyst Agost Benard said, ''Foreign currency inflows could also be affected, thus hurting Pakistan's external liquidity position. The other notable risk is that economic growth could also suffer.'' The agency had recently revised the outlook on the sovereign rating on Pakistan to negative after President Pervez Musharraf declared a state of emergency on November 3.

However, S&P said the sovereign credit ratings of Pakistan (foreign currency: B+/B; local currency BB/B) remain unchanged for now because the country's economic fundamentals are sufficiently strong to withstand a period of uncertainty without a material decline in credit quality.

''Greater clarity is only likely after the National Assembly elections, scheduled for January 8, 2008, but it's clear that past achievements could be put at risk and credit supporting factors diminish, should political uncertainty persist or, if the new paradigm yields revolving-door governments, where political imperatives detract from reforms and fiscal consolidation,'' Benard said.


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