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This study examines the underlying factors driving the persistence of Undocumented Oil Trade (UOT) in Pakistan, with a particular focus on the Pakistan-Iran border region. It argues that, despite a series of policy interventions by the Government of Pakistan, UOT remains a…
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Proponents of a free-floating or market-driven ER regime have argued that distortionary CB interventions in the foreign exchange (FX) market alter the ER trajectory. Historically, evidence shows such interventions result in ER misalignment, eventually leading to the widening of the trade deficits…
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This study examines the potential of Pakistan’s service sector to drive economic growth as the country faces declining manufacturing growth rates. As this shift aligns with global trends, the paper builds a case to confront structural and administrative inefficiencies within four key…
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Pakistan’s move to allocate 2,000 MW for AI data centers represents a major step forward to drive digital growth and foreign investment. However, this expansion may significantly strain the already stressed water resources. The issue persists due to over-dependence on groundwater, climate…
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This Policy Brief provides empirical evidence on how corruption affects foreign direct investment (FDI) in Pakistan. Despite the country’s persistently low Corruption Perceptions Index (CPI) score of 27, there is limited empirical research on the relationship between corruption and investment within Pakistan.…
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Exchange Rate Pass-Through (ERPT) refers to the degree to which changes in the exchange rate (ER) affect domestic prices of an economy. Since Pakistan’s economy has a considerable level of openness to international trade, the domestic price level is sensitive to external…
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Using a sectorally disaggregated Computable General Equilibrium (CGE) model, inclusive of direct cost estimates for military assets, infrastructure damage, disrupted trade and service sector impacts, this study estimates that India's economy incurred at least $88.712 billion in realized losses over the four-day…
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This Policy Brief examines the impact of Free Trade Agreements (FTAs) on Pakistan’s trade performance. It highlights that, over the years, Pakistan has concentrated on increasing the number of FTAs. However, there is inadequate empirical evidence to determine whether these FTAs have…
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This Paper explores the significance of industrial structural output for Pakistan’s economy focusing on GDP analysis. This may be about the mixed fortunes of the industrial sector, where sub-sectors like small-scale manufacturing and construction are relatively healthy whereas Large-scale manufacturing and…
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Tariff rationalisation is crucial for Pakistan's economic transformation, promoting export competitiveness, industrial efficiency, and trade integration. Pakistan's overdependence on high tariffs as a source of revenue has resulted in an anti-export bias, increasing the cost of production, deterring foreign investment, and…
