Deputy Governor of the State Bank of Pakistan (SBP), Dr. Murtaza Syed, has said that major industries will consider avoiding concentration in a single country like China in the future, following the shutdown of economic activities after COVID-19 outbreak.
Speaking at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Dr. Murtaza stated that Pakistan will be the likely destination of those industries looking to relocate once the situation gets better.
Coronavirus pandemic has forced the Chinese government to shut down nearly 60% of the country’s economic activities in an attempt to contain the spread of the deadly affliction.
As a result, global supply chains have been dealt a severe blow. Last year, the global GDP growth was recorded at around 3%, which is likely to decline this year keeping the ongoing situation in mind.
Major industries would prefer to avoid facing a similar situation in the future and will relocate to countries like Pakistan, claimed Deputy Governor SBP.
Moreover, Dr. Murtaza discussed how the risk appetite among global investors is declining and all the money is being shifted towards risk-free markets such as bonds.
England and other major economic players have slashed their interest rates to assist their markets to manage the repercussions of the Coronavirus.
Decrease in Imports
Deputy Governor SBP told the members of FPCCI that Pakistan imported electrical and electronic equipment worth $3.09 billion and machinery, nuclear reactors, and boilers worth $3.09 billion during 2018.
Pakistan completes most of the imports under CPEC since the work on the project began. With the development of Special Economic Zones (SEZs), the imports will decline significantly in the future.
Oil Prices to Decrease
Recently, global oil prices have plunged to an unprecedented multiyear low. It will ultimately benefit Pakistan as oil occupies most of the import bill.
In the months to come, the government will reduce the oil prices according to the global prices and will transfer all the benefits to the Pakistani people.