Islamabad: The ongoing invasion of Ukraine by Russia followed by the financial sanctions by European Union (EU), the US and the UK has had a major impact on the global financial market and is expected to take a toll on inflation in Pakistan also in the coming days.
Economic experts have said that the surge in the global commodity process due to the Russia – Ukraine conflict is expected to further aggravate the struggle for Pakistan.
“We saw Brent crude oil cross the $100-per-barrel mark. Prices of petrochemicals are directly linked with the global oil prices, hence they are expected to soar as well,” said Ehsan Mali, CEO of Pakistan Business Council (PBC).
Ehsan said that the latest imposed financial sanctions on the Russian energy supplies, which caters to many European and western countries, would forcefully vary the source of fuel, putting further more pressure on global oil prices.
“The government of Pakistan would be left with little room to absorb the shock, hence the local fuel prices were expected to rise,” said Ehsan.
It is pertinent to mention that the US, the UK and European Union are among the largest export destinations for Pakistan and any impact on their economies would have a direct impact on Pakistan’s earnings through exports.
“Russia and Ukraine jointly supplied at least 70 per cent of Pakistan’s wheat requirement last year, therefore, the cost of wheat import may swell due to the ongoing conflict,” Ehsan highlighted.
“Though neither Russia nor Ukraine were the major export markets for Pakistan, Moscow is expected to pause investment in the Pakistan Stream Gas Pipeline project until the conflict with Ukraine ends,” he added.
The visit of Prime Minister Imran Khan to Russia hours before the invasion of Ukraine, can also become an unwelcomed reason by many countries. This can also be coupled with FATF (Financial Action Task Force) pushing to keep Pakistan in its grey list and would definitely add up to grave consequences for the country in the days ahead.
“We may witness unjustified threats to our trade and tourism sectors but they will be temporary and easy to manage,” said Abdul Aleem, the Secretary General Overseas Investors Chamber of Commerce and Industry.