State Bank of Pakistan (SBP) Governor Jameel Ahmad on Monday expressed his anticipation that the recent decline in global oil prices would help cushion the impact of the proposed reciprocal tariffs imposed on Pakistan by US President Donald Trump.
Last week, Trump announced a 90-day pause on these tariffs, explaining that the decision came after over 75 countries had reached out to negotiate and had refrained from retaliating against the US. Previously, he had imposed tariffs of 29% on Pakistani exports to the United States.
Speaking on Geo News’ program “Aaj Shahzeb Khanzada Kay Sath,” the SBP Governor stated: “[Pakistan’s] total export to the US is $5.2 billion, with $4.2 billion of that being textile-related products.”
He acknowledged that the US tariffs would undoubtedly affect the textile sector but added that the overall impact was expected to be “contained.”
The SBP Governor voiced his opinion that the positive effect of falling oil prices would likely outweigh the negative impact of the US tariffs on Pakistan’s economy. “We are expecting an overall positive impact from the US tariffs,” he added.
Ahmad further assured that the government and the SBP would provide support to industries if they were to face a significant negative impact from these tariffs.
Responding to another question, he indicated that Pakistan’s current account balance was projected to improve in March compared to the preceding months. “We are in the process of finalizing the numbers. Typically, this is completed by the 20th of each month,” he explained.
Referring to the increase in exports and remittances, he mentioned that earlier projections estimated the current account to be within plus or minus 0.5% of GDP by the end of FY25, but now they could confidently say it would remain in surplus.
He projected that total remittances for FY25 were expected to be around $38 billion. The SBP Governor also stated that foreign exchange reserves were anticipated to reach $14 billion by June of this year.
Earlier in the day, while addressing a gong ceremony at the Pakistan Stock Exchange (PSX) to mark Pakistan Financial Literacy Week 2025, the SBP Governor reflected on the country’s economic progress and the path towards sustainable and inclusive economic growth, noting that Pakistan had made noticeable strides on the macroeconomic front and that the economy was gaining momentum.
He highlighted that workers’ remittances had reached an all-time high of $4.1 billion in March 2025 – partly a result of government and SBP efforts to incentivize inflows through formal channels, as well as the smooth functioning of the domestic FX market. He reiterated that total remittances for FY 25 were expected to be approximately $38 billion.
The Governor also shared key initiatives under the National Financial Inclusion Strategy (NFIS) 2024-28, including goals to increase financial inclusion from 64% to 75% by 2028 and to reduce the gender gap in financial services from 34% to 25% by the same year.
‘25% Decline in Pakistan’s Exports to US’
Conversely, the Pakistan Institute of Development Economics (PIDE) has cautioned that the 29% reciprocal tariffs imposed by US President Donald Trump are likely to severely impact Islamabad’s exports to Washington, potentially leading to a 20-25% decline, equating to an annual loss of between $1.1 billion and $1.4 billion, as reported by The News on Monday.
Describing it as a looming crisis on Pakistan’s trade horizon, PIDE has stated that the proposed reciprocal tariffs by the US could have devastating consequences for the country’s export sector.
In a stark policy note released on April 13, 2025, the institute warned that these tariffs could trigger macroeconomic instability, significant job losses, and a critical reduction in foreign exchange earnings.
The study — conducted by Dr Muhammad Zeshan, Dr Shujaat Farooq, and Dr Usman Qadir — analyzes the potential consequences of a proposed 29% reciprocal tariff on Pakistani exports to the US. When combined with the existing 8.6% Most Favored Nation (MFN) tariff, the total duty could reach 37.6%.
The likely outcome would be a 20–25% decrease in exports to the US, translating to an annual loss of $1.1–1.4 billion, with the textile sector expected to bear the brunt of this impact.
“Trade is not a zero-sum game. It’s about shared value — about building connections that make both economies stronger. These proposed tariffs risk severing those ties,” stated Dr Nadeem Javaid, PIDE Vice Chancellor, in a strong statement accompanying the new policy note. “At PIDE, we see this moment not just as a threat, but as a catalyst — for course correction toward a more resilient, diversified, and strategic export future for Pakistan.”
In fiscal year 2024, Pakistan exported goods worth $5.3 billion to the United States, making it the country’s largest single-country export market. A significant portion of these exports consisted of textiles and apparel, which already face tariffs as high as 17%.
If the proposed tariffs are implemented, Pakistan’s price competitiveness would be severely eroded, potentially allowing regional competitors such as India and Bangladesh to capture market share. The economic repercussions would extend beyond the textile industry.
