KARACHI, May 19: Rising foreign investment in Pakistan is setting new records with each passing day, reflecting attraction and opportunity attached with the growing economy.

Foreign investment reached almost $6 billion during the first 10 months of the current fiscal 2006-07, rejecting speculations that general elections would bar the investors to put their money at risk.

Speculators believe that that risks are attached with instability which may emerge after general elections expected by the end of 2007.

Though foreign investment has been limited to a few sectors, it has increased by over 47 per cent compared to the corresponding 10 months of last year.

Latest official figures showed that foreign investment during July-April 2006-07 reached $5.979 billion against $4.049 billion during the corresponding period of last year.

“It looks that foreign investment would reach $7.2 to $7.5 billion by the end of the current fiscal which will give immense support to country’s soaring current account deficit,” said Abid Saleem, an analyst.

The government has been lucky that it received unexpectedly very high flow of workers’ remittances being sent by the overseas Pakistanis.

During the first 10 months of the current fiscal, the country received $4.450 billion which was 22.6 per cent more than the corresponding period of last year.

The fear of unexpectedly low exports growth and high import has been subsided by the record foreign investment and workers’ remittances.

Analysts said the widening trade deficits were of prime concern for the government which could hit up to $12 billion by the end of the fiscal 2006-07.

“The government has been borrowing heavily to meet the gap, but it will result in more borrowings in future,” he said.

Pakistan has planned to launch Euro Bonds to fetch dollars from the market not relying on donor agencies but despite high commercial prices, the country would have to pay interest on the bonds.

Sources said the government would launch Euro Bonds worth $1 billion and it is now encouraged by the latest rates assigned by the Standard & Poor’s. The rating agency assigned B+ to the bonds in pipeline.

The rating agency also rejected the speculations that the recent political uncertainty would hurt Pakistan’s rating in the international bonds market. This supports the government to carry on its economic policies without making any significant change in the coming budget.