WASHINGTON, Feb 12 Pakistan is headed for economic growth of 7.5 per cent this year, as it benefited from its support for the US war against terrorism and an IMF reform programme, the country's ambassador to the United States said on Friday.

In an interview with Reuters, Pakistan ambassador Jehangir Karamat said his country was in the midst of major economic reforms when the attacks of Sept 11, 2001 occurred, so the country was ready to react when its backing for the Bush administration's war on terrorism opened political and economic doors.

"It just happened that when all of this (economic change) was going on, 9/11 happened and we saw massive inflows of money into Pakistan, and the improved relationship with the US opened up doors for us as far as multilateral financial institutions," Mr Karamat said.

Pakistan completed an economic programme with the International Monetary Fund in December 2004 with applause from the Washington-based lender, the first time Pakistan has finished an IMF programme.

Pakistan's economic growth soared to 6.5 per cent last year with the help of the IMF's domestic economic adjustment programme, up from growth of one to three per cent in the late 1990s. Mr Karamat forecast annual growth of 7.5 per cent in 2005 and said eight per cent growth was possible next year, a rate the government sees necessary to reduce its high poverty levels.

Still, Pakistan will need financial support from the World Bank and other loans from international lenders to meet future financing needs, he said.

The country will also rely on domestic and international capital markets for additional financing, he added. The government recently raised $600 million on European markets in its second international bond issue.

US bilateral development aid for Pakistan is expected to be about $691 million this year, he said. Pakistan hoped to convince the Bush administration to lower tariffs on textiles, Mr Karamat said, a move that would allow Pakistani goods to enter the US more cheaply.

Such an agreement would save Pakistan billions of dollars and boost employment, he said. The sector has already seen $4 billion new investment in the past four years.

"That is one thing that would open up millions of jobs in Pakistan, if that kind of arrangement were to come about," he said.

The US and Pakistan are also exploring a bilateral investment treaty, but Mr Karamat said the US wanted more progress on intellectual property rights, judicial security and child labour issues. "We will be able to address those concerns," He said.-Reuters