Press Release

Separation of UK from EU bloc will impact Pakistan’s economy, Khalid Tawab

(Karachi P.R. 29th June, 2016) Senior Vice President of FPCCI Sheikh Khalid Tawab expressed his concern over the impact of separation of United Kingdom from European Union on Pakistan economy and said that parting of UK from EU may depreciate both Euro and Pound Currencies although UK had not given acceptance to Euro as medium of exchange with in UK. He said that significant portion of our foreign reserves is in the form of Euro currency and in the event of dispersion of UK from EU both the currencies may depreciate which will ultimately impact the monetary parameters in Pakistan.

European Union bloc is the major trading partner of Pakistan and in case of declining value of Euro and Pounds may decrease money supply in Pakistan which may cause to push interest rates upward and ultimately increases the cost of doing business in Pakistan, Tawab said. He further said that the Pakistani exports to EU countries may reduce by the appreciation in Pak rupee against both the currencies as significant appreciation witnessed during last two days. He said that presently Pakistan export to EU countries textile products and clothing, staple fiber, leather products and raw hides and skins, cereals, toys games, sports requisites and optical items. On the other hand, the import of EU countries may increase because of lower prices of EU products in terms of Pak rupee, he said. He further identified that Pakistan mainly import machinery, boilers, electrical & electronic items, iron & steel, pharmaceutical products, mineral, plastic products, chemical products and organic chemical etc.

Tawab indicated interesting facts about the decision of Voters of UK regarding separation of UK from EU that majority votes in the metropolitan areas and business centers including in London, Scotland and Ireland was in the favour of EU. However, other than business centers and metropolitan major public votes against EU. Khalid Tawab said that it indicates a clear distinction in the voting patterns between general public and the business peoples. He said this distinction may affect the in/out flow of investment in UK.