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Decline in oil prices to bode well for Pakistan’s economy: Fawad

27 Nov, 2021
Oil prices in the international market have come down says the information minister. BR
Oil prices in the international market have come down says the information minister. BR

Federal Minister for Information and Broadcasting Fawad Chaudhry said that the drop in oil prices would bode well for Pakistan's economy.

Talking to media persons on Saturday, the minister, while briefing on the economic situation of the country, said that fortunately, oil prices in the international market have come down.

He said that the effect of the decline in oil prices on the economy would be seen in two months. “If the trend continues, and oil prices continue to decline, it will have a positive impact on Pakistan's economy,” said Fawad.

Oil prices plunged $10 a barrel on Friday, their largest one-day drop since April 2020, as a new variant of the coronavirus irked investors, fanning concerns that a supply surplus could swell in the first quarter.

Brent crude settled down $9.50, or 11.6%, to $72.72 a barrel, a weekly decline of more than 8%. U.S. West Texas Intermediate (WTI) crude settled down $10.24 on Friday, or 13.1%, at $68.15 a barrel.

Meanwhile, the federal minister said that Pakistan's economic problems are declining and the economy is moving towards stability.

The government spokesperson lauded the role of Saudi Arabia for providing financial assistance to Pakistan. Under the $4.2-billion Saudi funding facility, $3 billion will be deposited in Pakistan's central bank and $1.2 billion will be used for to finance the oil derivatives trade.

“The agreement with the International Monetary Fund (IMF) is also in its final stages all these developments will bring economic stability in the country,” said the minister.

He added that food prices have also fallen this week registering a decline of 0.67%.

The Sensitive Price Indicator (SPI) for the week ended November 25, recorded a decrease of 0.67 percent due to decrease in the prices of tomatoes (15.42 percent), onions (7.43 percent), chicken (6.62 percent), sugar (1.87 percent), wheat flour (0.95 percent), LPG (0.73 percent), and rice Irri (0.59 percent), says the Pakistan Bureau of Statistics (PBS).

However, inflationary pressure has persisted in Pakistan for months with the rupee nearing its historic low once again on Friday. Headline inflation clocked in at over 9% in October with expectations higher for the figure in November.

This story first appeared in Business Recorder on November 27 2021