Int’l oil prices drop to mitigate Trump’s tariffs impact on Pakistan: SBP governor
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SBP Governor Jameel Ahmad addressing a press conference in Karachi on January 29, 2024, in this still taken from a video. — Facebook/@StateBankofPakistanPakistan
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State Bank of Pakistan (SBP) Governor Jamil Ahmed said Monday that the recent slides in oil prices globally could help Pakistan protect Pakistan from the full impact of the proposed US tariff.
Trump announced a 90 -day break at rates last week, saying he had taken the decision when more than 75 countries arrived for talks and did not retaliate against the United States. Earlier, it had imposed 29 % of the taxes on Pakistani exports to the United States.
The SBP governor addressed the Geo News program “Seth of Shahbaz Khanzada today”: “[Pakistan’s] Total exports to the United States are $ 5.2 billion and 2 of them are 4.2 billion textile products.
He maintained that US prices would clearly affect the textile sector, adding that its effects would be “present”.
The SPB governor believed that the effects of falling oil prices would be much higher than US prices on Pakistan’s economy. “We are expecting the overall positive impact of US prices,” he added.
Ahmed added that the government and SBP will help industries if they have a significant impact.
According to another question, he said that the balance of Pakistan’s current account in March is expected to improve in March compared to the previous months. He added, “We are in action to finalize this number. In general, it is finalized by the 20th of each month.”
Referring to the increase in exports and remittances, he said he was first expecting that the current account will be more than 0.5 % or minus at the end of the financial year, but now he can say that it will remain extra.
He said the total remittances for the financial year 25 are expected to be $ 38 billion. The SBP governor added that foreign exchange reserves are expected to reach $ 14 billion by June this year.
Earlier today, the Governor of SBP, considering the path of economic development and sustainable and comprehensive economic growth, said that Pakistan has made significant progress on the country’s economic front and economy.
He gave these remarks while addressing a gong ceremony held at the Pakistan Stock Exchange (PSX) here to celebrate the Pakistan Financial Literacy Week 2025.
He highlighted that in March 2025, the remittances of the workers reached the highest level of $ 4.1 billion at a timely manner-the government and the SBP’s efforts reflects the efforts of the government and the SBP to encourage the channel to channel the arrival through formal channels, as well as the domestic FX market smooth. He said that overall remittances are expected to be $ 38 billion for the financial year 25.
The Governor shared key measures under the National Financial Instrument Strategy (NFIS) 2024-28, which includes efforts to increase financial inclusion from 64 % to 75 % by 2028, while by 2028 to reduce the gender difference in financial services from 34 % to 25 %.
’25 % of Pakistan’s exports decreases to the United States’
On the other hand, the Pakistan Institute of Development Economics (PIDED) has warned that 29 % of the mutual rates imposed by US President Donald Trump are likely to export Islamabad to Islamabad, resulting in a decrease of 20-25 percent to $ 1.1 billion annually.
What can be said as a storm on Pakistan’s trade horizon, Pad has said that the proposed bilateral prices by the United States could have a devastating impact on the country’s export sector.
In a Stark Policy Note released on April 13, 2025, the Institute warns that it may reduce economic volatility, significant job losses, and a significant reduction in foreign exchange revenue.
The study, conducted by Dr. Muhammad Zeeshan, Dr. Shujat Farooq, and Dr. Usman Qadir, analyzed the results of the 29 % bilateral rates proposed on Pakistani exports to the United States. When the current 8.6 % of the most preferred nation (MFN) is included in the tariff, total duty can reach 37.6 %.
This will likely result in a 20-25 % reduction in exports to the United States, which will be translated at an annual loss of $ 1.1-1.4 billion, with the shock in the textile sector.
“Trade is not a game according to zero. It is about a common price-about the construction of the two economies that strengthen both economies. These proposed revenues take the risk of eliminating these relations.” “In the pad, we see this moment not only as a threat, but also as a catalyst – more flexible, diverse and strategic export for Pakistan to the future of course improvement.”
In fiscal year 2024, Pakistan exported $ 5.3 billion worth of goods to the United States, making it the export market of the country’s largest country. An important part of these exports was textile and apparel, which already faces up to 17 % prices.
If the proposed rates are implemented, Pakistan’s prices will be severely eliminated, which will potentially allow regional rivals like India and Bangladesh to occupy the market share. Economic results will move beyond textile.
