China’s rebound seen as positive for global economy including Pakistan
Lahore: The Coordinator to Federal Tax Ombudsman and Chairman Kyrgyzstan Trade House Meher Kashif Younis said that China’s rebound would prove as positive for global economy including Pakistan and help to some extent offset risks.
Talking to a delegation of industrialists and traders led by Shahid Nazir in Lahore, he mentioned that when Chinese policymakers began preparing for the reopening, many international observers warned it would unleash inflationary headwinds.
He said it was their assumption as the world’s biggest factory and the second-largest economy re-opens for business after three years of Covid-19 pandemic restrictions, it will have to cope with a surge in demand. That, in turn, would trigger global inflationary pressures as in the United States and the European Union which have been struggling with elevated inflation since their re-opening, he added.
Younis contended that in the Eurozone, the situation was worse as inflation remained 8.5 percent last month after peaking at 11.1 percent in last November.
Meanwhile, the policy makers have raised interest rates to 15 years high to bring Euro area inflation under control, he observed.
Younis opined that in addition to domestic demand, the recovery will also have an impact on global growth including Pakistan through commodity demand and travel while the recovery in outbound tourism will be key to the recovery of regional and neighbouring economies.
He said the global effect is already discernible in commodity prices. As the recovery broadens oil and metals will follow.
While concluding, Meher Kashif Younis said spillover will be significant in those economies that are part of the Regional Comprehensive Economic Partnership, the vast new trade block and those participating in the huge Belt and Road Initiative including Pakistan, he stated. He hinted that reopening could lift global Gross Domestic Product (GDP) by an impressive 1 percent in 2023.