- SBP governor expects overall positive impact despite US tariffs.
- Says impact of US tariffs to be “contained” on Pakistan, economy.
- Reserves expected to reach $14bn by June, says SBP governor.
State Bank of Pakistan (SBP) Governor Jameel Ahmad on Monday anticipated that the recent drop in global oil prices would cushion the impact of the proposed reciprocal tariffs imposed by US President Donald Trump on Pakistan.
Trump, last week announced a 90-day pause on tariffs, saying he took the decision after more than 75 countries had reached out to negotiate and did not retaliate against the US. Earlier, he had imposed 29% tariffs on Pakistani exports to the US.
Speaking on Geo News programme “Aaj Shahzeb Khanzada Kay Sath”, the SBP governor said: “[Pakistan’s] total export to the US is $5.2 billion and out of which $4.2 billion are textile-related products.”
He maintained that the US tariffs would obviously affect the textile sector, adding that its impact would be “contained”.
The SPB governor was of the view that the impact of falling oil prices would be bigger than that of US tariffs on Pakistan’s economy. “We are expecting an overall positive impact from the US tariffs,” he added.
Ahmad further said that the government and the SBP would support the industries if they face a significant impact.
To another question, he said that Pakistan’s current account balance is expected to improve in March as compared to the previous months. “We are in process to finalise the number. Normally, it is finalised by 20th of each month,” he added.
Referring to rise in exports and remittances, he said that they were expecting earlier that the current account would be plus or minus by 0.5% of GDP at the end of FY25 but now they can say that it would remain surplus.
He said that total remittances for FY25 were expected to be around $38 billion. The SBP governor further said that foreign exchange reserves were expected to reach $14 billion by June this year.
Earlier today, the SBP governor, reflecting on economic progress and path to a sustainable and inclusive economic growth, said that Pakistan made a noticeable progress on macroeconomic front and economy of the country is gaining momentum.
He made the remarks while addressing the gong ceremony held here at the Pakistan Stock Exchange (PSX) to celebrate Pakistan Financial Literacy Week 2025.
He highlighted that workers’ remittances reached an all-time high level of $4.1 billion in March 2025 – partly reflecting the result of government and SBP efforts to incentivize the channeling of inflows via formal channels, as well as smooth functioning of the domestic FX market. He said that total remittances for FY 25 are expected to be around $38 billion.
The Governor shared key initiatives under the National Financial Inclusion Strategy (NFIS) 2024-28, including efforts to increase financial inclusion from 64% to 75% by 2028, while reducing the gender gap in financial services from 34% to 25% by 2028.
‘25% decline in Pakistan’s exports to US’
On the other hand, the Pakistan Institute of Development Economics (PIDE) warned that the 29% reciprocal tariffs imposed by US President Donald Trump are likely to hit Islamabad’s exports to Washington resulting in a 20-25% decline amounting to an annual loss of between $1.1 billion to $1.4 billion, The News reported on Monday.
What can be termed as a storm brewing on Pakistan’s trade horizon, PIDE has said that proposed reciprocal tariffs by the US could have a devastating impact on the country’s export sector.
In a stark policy note released on April 13, 2025, the institute cautions that these tariffs could lead to 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 — analyses the consequences of a proposed 29% reciprocal tariff on Pakistani exports to the US. When added to the existing 8.6% Most Favored Nation (MFN) tariff, the total duty could reach 37.6%.
The result would likely be a 20–25% decline in exports to the US, translating into an annual loss of $1.1–1.4 billion, with the textile sector bearing the brunt of the blow.
“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,” said Dr Nadeem Javaid, PIDE Vice Chancellor, in a strong statement accompanying a 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 $5.3 billion worth of goods to the United States, making it the country’s largest single-country export market. A significant portion of these exports were 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, possibly allowing regional competitors like India and Bangladesh to capture market share. The economic consequences would extend beyond textiles.
