LAHORE, Dec 28: Fears of a serious economic downturn loom large on the horizons as the country plunges into yet another period of uncertainty triggered by the tragic assassination of Pakistan People’s Party chairperson Benazir Bhutto on Thursday.

The business came to a complete halt on Friday in Lahore and other parts of the country as nation mourned the loss of its former prime minister, and spontaneous violent protests erupted.

All big and small markets, including restaurants, remained closed in the Punjab capital in protest against the gruesome killing as factories in and around the city reported lower labour turnout.

A similar reaction to the incident was reported from other parts of the province. The stock markets have already been closed for three days.

CNN suggested in its morning transmission that Pakistan’s credit rating could be lowered in the aftermath of Ms Bhutto’s assassination, reporting that the incident had unsettled the world currency and other markets as concerns about the stability and security of Pakistan heightened across the globe.

“The manufacturing activity has been disrupted badly in the provincial capital of Punjab due to Thursday’s gruesome event. But the situation is worse in Sindh where, we have been told, several textile and other factories had to shut their operations,” a senior member of the All-Pakistan Textile Mills Association told Dawn.

Another manufacturer said Ms Bhutto’s assassination would have serious repercussions for industry and national economy.

“If the country sinks further into political turmoil, we’ll see a visible reduction in domestic consumption and a further decline in exports. That is going to hit the economy hard,” he said.

Caretaker finance minister Dr Salman Shah agrees that the economy would be hit hard if violence continues.

“I call upon the people to exercise restraint and express their emotions in a dignified and peaceful way. The entire world is watching us and its attention is focused on Pakistan at this moment. Let us show to the world that we are a democratic, peaceful nation,” he said while talking to this reporter by phone from Islamabad.

“The world knows that some terrorists want to destabilise Pakistan. But our economic and trade relations depend more on how we react in such situations. We should reject terrorism and extremism and resolve our internal differences in a peaceful and democratic manner,” he said. But he confessed that the national economy would be hit severely if law and order situation worsens.

“Our trade and investment relations with the outside world largely depend on peace in this country.”

Economist Dr Faisal Bari said the killing of the former prime minister could have medium-to-long-term implications for economy as the incident had constricted whatever little space for democratic politics was available to the nation.

“This incident has added to the uncertainty, which will hit economy.”

The industry has long been expressing concerns over political uncertainty that was set off by the presidential reference against the deposed Supreme Court chief justice Iftikhar Mohammad Chaudhry in March, affecting the business and economy.

“The manufacturing sector is already undergoing worst period in the last several years because of high costs of utilities and raw material, shortage of energy – electricity and gas, and high price of credit. Our country perception is already very poor in the markets we export our goods to. The buyers don’t visit Pakistan because of travel advisories issued by their governments.

“You can well imagine what kind of a message the assassination of Ms Bhutto has sent to the global business. Who will trade with us after this tragedy?,” asked a knitwear manufacturer.