Noting that the economy has continued to hum despite some of the country's worst unrest in years, leading financial daily the Wall Street Journal said the outlook is no longer rosy now because of uncertainty about foreign aid and investors' growing anxiety.

One of the potential problem, it said, is foreign investors could be more cautious about pumping money into a country that is apparently becoming less stable and more authoritarian.

An analyst at credit-ratings agency Moody's Investors Service Inc. said it would continue to review Pakistan's sovereign debt in light of its political situation.

"The ratings of Pakistan have always been under review given how turbulent the situation has been," said the analyst, Aninda Mitra.

"Last year, Pakistan enjoyed record inflows of foreign direct investment as banking, telecommunication and property markets boomed," the Journal said.

Partly because those investment numbers were so high and party because of worries about nation's stability, foreign investment slipped in July-September period from a year earlier by 10.8 per cent to USD 990.1 million.

There are now fears of a steeper downturn after emergency rule and an escalating Islamic militancy that has targeted both soldiers and civilians with suicide attacks.

"It's very difficult to see how foreign investment is going to hold up, since it can be the most politically sensitive," Ahsan Chishty, an economist in Karachi for Standard Chartered Pakistan, a unit of Standard Chartered PLC of the U.K., is quoting as saying.

Besides, billions of dollars in foreign assistance might be in jeopardy after President Pervez Musharraf's veering away from a planned transition to civilian rule angered allies such as the U.S.

It has sent nearly USD 11 billion in aid to Pakistan since the Sept. 11, 2001, attacks, mostly to the army to fight militants. Before those attacks, Pakistan was struggling to pay off international loans, and sanctions for nuclear testing had frozen U.S. aid.