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Pakistan’s ailing textile sector may suffer further due to Brexit

According to experts, Brexit will hit the Pakistan textile sector the most. However, the negative impact emanating from the Brexit will be comparatively less for Pakistan’s economy as it is relatively insulated from global markets. This is because Pakistan’s exports are only 7 per cent of the country’s total Gross Domestic product (GDP). They added that lower commodity prices could result in even lower inflation expectations, which will bode negative for outlook of banking sector.

Brexit has come as a surprise for global markets where Pound Sterling to $ has come off by 7 per cent to 1.35 (lowest since 1985) as compared to yesterday where the Pound Sterling to $ was 1.45. Global markets have also taken a toll with across the board losses.

International oil prices have come off as a result of global uncertainty and concerns over a recession in UK with a knock off effect in EU. Oil prices are down 4 per cent today with WTI trading at $47. This has led to weakness in local oil Exploration and Production (E&P) companies. Yen has appreciated as a result of Brexit and is trading at 101.9 to US$, up by 3 per cent as of yesterday. This will be negative for local auto sector as portion of their costs are denominated in Yen.

 
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