Slump in US, EU can hit Pakistan exports

ISLAMABAD: The Pakistan Economy Watch (PEW)  said Pakistani exports are set to get a hit as western economies which are the main export destinations for Pakistan have been badly hit by the war between Russia and Ukraine. The government should find ways and means to tackle the problems, otherwise, it will have to borrow more to keep the economy afloat, it said. All tactics against Russia, including economic sanctions, have failed, and the economy of America and Europe has fallen into a crisis, said Dr. Murtaza Mughal, President PEW.

He said that rising inflation in America and Europe is turning into a recession due to which the demand is decreasing. This will affect Pakistani exports because of a reduction in the purchasing power of the people in the west. In case of a serious recession in the west, Pakistan will have to manage over forty-one billion dollars this year, for which more than expected loans will have to be taken.

Dr Mughal said that because of the wrong policies and irresponsible actions of the United States and Europe, the economic situation is deteriorating all over the world, while the budgets of the United States and Europe have also been badly affected.

Military spending, inflation, uncertainty, and public unrest are on the rise in these countries, while their currencies continue to depreciate. The currencies of dozens of other countries which are not involved in the issue are also weakening. However, he said, contrary to the expectations, the Russian currency has become the best-performing currency in the world.

The day Russia attacked Ukraine, the value of one US dollar was equal to 85 rubles and since then the value of the ruble has increased by thirty-five percent and now the value of one dollar is equal to fifty-three rubles, he informed.

Russia’s annual income from the energy sector was 250 billion dollars before the war, which has now increased to over 300 billion dollars. Similarly, Russia is getting a lot from other exports and because of its economic strength, the interest rate has also been reduced.

He said the Western bloc should not continue the lost war and find a solution to the conflict as the economy of most countries in the world is going down, which will have a greater impact on the poor countries.