Oil globally going up has put up a new set of challenges for the slow-growth and high-inflation economy of Pakistan.
On the one hand, gold prices are rising due to the difficulty in obtaining US Dollars, CEO of Alpha Beta Core Securities, Khurram Schehzad told ProPakistani.
However, with Brent at +$90, expect an additional US$ 1 billion import bill going forward unless the government raises taxes and kills demand further (typical formulae, unless it corrects taxpayers’ balance and its tax-exp equation), The Pakistani Rupee is expected to come under pressure, especially if global energy commodities continue to persist at higher levels.
He said higher Oil and under-pressure PKR may result more in higher petroleum, gas, and electricity prices therefore inflation may continue to persist, while forex reserves, debt servicing, and fiscal positions may continue to come under pressure.
Persistent higher inflation with abysmally low growth may result in poverty levels going up further.
“So, we have stabilized but are still on thin lines and not out of the woods yet. High challenges ahead. We have to plan and implement reforms quicker and sooner rather than later to rein in the emerging global uncertain geopolitical (wars, elections, tightening) as well as economic situation,” he added.
