ISLAMABAD: Following Prime Minister Imran Khan’s statement on Tuesday that attacks on Saudi Arabia’s oil supply were a threat to the “global economy,” experts believe the government’s efforts to meet its fiscal deficit targets in line with International Monetary Fund (IMF) conditions could be reversed if oil prices increased following Saturday’s attack on two Saudi oil facilities.
“If oil prices surge, Pakistan won’t be able to meet fiscal deficit targets set by the IMF,” Khurram Hussain, economic expert and business editor at national newspaper, told Arab News. The pre-dawn attack claimed by Yemen’s Houthi rebels led to an almost 20% increase in global oil prices on Monday, with fears of a surging fiscal deficit in Pakistan where a majority of oil is imported from Saudi Arabia. “Pakistan’s oil imports constituted 26 percent of the country’s total import bill of $54.8 billion during the last fiscal year,” Hussain said, and added that any escalation in Middle East tensions, would “definitely impact our economy.” “This government took at least one year to arrest the fiscal deficit and it has yet to bring it to the level as agreed upon with the IMF, but this would be reversed with an increase in oil prices” he said.