smartcybers786@gmail.com 
A currency exchange agent counts US Dollars at his company in Iraq's southern city of Basra, on December 8, 2023. — AFP
#Trump #trade #war #hit #remittances #experts
KARACHI: Experts have warned that US President Donald Trump’s trade war, which has intensified his retaliation on US goods by 125 %, may reduce global recession and oil prices, resulting in low remittances to Pakistan.
Government officials, analysts, economists, bankers and think tanks in Pakistan are examining the economic impact of the new broom imposed by the United States on the import of their trade partners, including 29 % tariffs on imports from Pakistan. Some experts have predicted a possible loss of $ 2- $ 3 billion in the country’s exports and remittances.
The Pakistan Business Council (PBC) has highlighted that the United States is the largest country in Pakistan, which has participated in the largest trade surplus for the country. In 2024, the United States imported $ 5.46 billion worth of goods from Pakistan, which represents 17 % of Pakistan’s total exports. That same year, Pakistan recorded an additional $ 3.33 billion trade with the United States.
When asked if Pakistan’s remittances were suffering from global economic misery due to new US tariffs, experts said remittances could be indirectly affected. Prices may reduce industrial production in key economies, which could potentially reduce employment or reduce wages for Pakistani immigrants. The low remittances will be sent to Pakistan in the possibility of revenue revenue abroad.
Remittances increased by 32.5 % to $ 24 billion in the first eight months through February. The government’s efforts to curb foreign exchange trade, increased citizens abroad, strengthened economic stability by international.
The Monetary Fund (IMF) Loan Program, and the Facility of the Bright Digital Account, has collectively promoted remittances sent home by immigrants to help their families. This cash transfer helps the nation’s economy, which is struggling to navigate the recovery. In an economy like Pakistan, remittance flow is very important as they permanently support the current account.
JS Bank Limited Investment in Syed Jafar Raza and Group Head of International and Transaction Banking has said that there is no direct connection between US revenue decisions and remittances, but two factors could potentially affect home remittances to Pakistan.
Raza said the expected rise in inflation in the United States could squeeze the working class’s Daspura’s disposable income, which could reduce savings to repatriate. Since countries like China, India (to some extent Pakistan, which receives about 12-15 % of its total remittances from the United States), and South American countries are among the biggest recipients, they can feel the pinch. He added that there are wider economic implications.
“For example, prices can indirectly affect the flow of remittances by changing employment opportunities for Pakistani workers in the United States.
Responding to the question of whether trade tensions affect Pakistan’s migration, it leads to major sources of remittances, including the Gulf States, the United States and Europe, adding that in the short term, it has no effect. But long -term implications deserve attention. Strict immigration policies or demand for migrant labor may decrease in trade -affected areas. For example, the Gulf states can prefer local employment during economic misery, while strict visas can be imposed in the United States and Europe. These factors can gradually change the transition samples and remittance flow over time.
The Gulf region, known for oil wealth, is the main source of remittances for Pakistan. Saudi Arabia and the United Arab Emirates send an average of 700 million and more than 600 million million every month to Pakistani citizens working, which increases a total of $ 3 billion.
Raza said, “I am sure that if the world is facing a significant decline in oil prices, the Gulf countries will try to limit their supply to the fuel prices. As a result, this sector will create waste, and that is why we can reduce the reduction in these countries.”
Ibrahim Amin, a banking expert and chairperson of the Delson Group, noted that commercial tension creates uncertainty in labor sectors such as construction and logistics. The Gulf countries can reduce their budget and rent rent due to financial pressure. In addition, Western economies can implement strict immigration policies operated by economic nationalism. As a result, the stability of the new migration and the existing immigrants can have a negative impact on both.
Amin said, “GCC’s economies relies heavily on oil and other items. Falling prices are delays in efficiency, public spending cuts and infrastructure.” Amin said.
A note of the topline securities shows that remittances are not expected to be significantly affected by low oil prices, as existing oil prices remain far more well than the level shown in 2016. During this year, when oil prices dropped from $ 40 a barrel, remittances from the Gulf countries were affected at a period of 6-12 months, which was reduced by 5-6 %.
