WB OKs $500 mln interest-free loan to Pakistan

WASHINGTON The World Bank said Thursday it approved a 500 million dollar, interest-free credit to support Pakistan's program on economic stability. "Pakistan has experienced severe external and internal shocks in the past year and is confronting a very difficult macroeconomic situation," the Washington-based World Bank said in a statement. "The rise in international oil and food prices sharply inflated the country's import bill and the subsequent slowdown in the global economy dampened external demand for Pakistan's exports." It noted that "political turmoil and uncertainties affected investor confidence," leading to capital outflows. The Poverty Reduction and Economic Support credit is designed to support measures that promote macroeconomic stability, the Bank said. It also seeks to improve Pakistan's competitiveness by bolstering the financial sector and cutting barriers to business.