Political turmoil to exacerbate Pakistan economy

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KARACHI, March 2 (AFP): Political turmoil in Pakistan after a court banned the most popular opposition leader running for public office could make the stagnant economy even more dependent on US aid and IMF bailouts.

Thousands of supporters of Nawaz Sharif have rallied across the nuclear- armed country, with mobs setting cars ablaze and clashing with police in the biggest protests against the rule of President Asif Ali Zardari.

Analysts say Pakistan can ill afford a political crisis on top of extremist attacks that have killed more than 1,600 people in under two years, financial crisis and international pressure to prosecute those behind the Mumbai attacks.

As soon as the Supreme Court disqualified Sharif last Wednesday, panic selling wiped five percent off the Karachi Stock Exchange in the worst single- day performance in 32 months.

Buffeted by nationwide bombings, insurgency and global financial turmoil, Pakistan was hit last year by 25 percent inflation and saw 10 billion dollars wiped off its international reserves from October 2007 to October 2008.