Crude oil prices approaching $100/barrel are a warning sign for the global economy and could further increase pressure on Pakistan’s import bill, Federation of Pakistan Chambers of Commerce and Industry President Atif Ikram Sheikh said on Wednesday.
Sheikh expressed deep concern over rising regional tensions and their potential impact on the global and Pakistani economies, saying the continued increase in international oil prices was a major concern for the business community.
“Crude oil prices approaching $100/barrel are a warning bell for the global economy,” he said in a statement, warning that higher oil prices could increase Pakistan’s import bill and negatively affect economic activity and businesses.
Sheikh urged the government to take immediate and effective measures to contain energy prices and business costs. He said higher energy costs could increase production expenses for Pakistani industries as well as undermine the competitiveness of the country’s exports in international markets.
The FPCCI president also warned that escalating tensions in the region could increase global trade, shipping and insurance costs while creating disruptions in supply chains. He said tensions between the United States and Iran and Houthi attacks on Saudi Arabia could adversely affect global trade and supply chains, creating additional challenges for the world economy.
Sheikh warned that further escalation in the Middle East could push global crude oil prices above $100 a barrel, with developing economies likely to face a greater impact because of their dependence on imported energy. “Pakistan will have to formulate an alternative strategy to protect itself from the impact of rising global energy prices,” he said.
He called for greater support for the private sector to boost exports and reduce the country’s reliance on imports, describing it as an urgent priority.
Sheikh said the government and business community should jointly formulate a comprehensive strategy to deal with the energy crisis and global economic uncertainty. “Economic stability, continuity of business activity and a favorable environment for industry and trade should be Pakistan’s top priorities under the current circumstances,” he said.
He said businesses were facing new economic challenges because of uncertainty in international markets and stressed that peace and stability in the region were essential for promoting trade and economic activity not only in Pakistan but across the world. Sheikh urged all parties to exercise restraint and wisdom to reduce tensions and work toward restoring peace and stability in the region.