'Global trade: Don't miss the bus again'

That Business Recorder op-ed writer Ali Khizar has deep insights into the country's economy is a fact. His are always informed opinions duly supported by facts and evidence. In his latest contribution for the newspaper titled 'Global trade: Don't miss the bus again' carried by the newspaper on Sunday, he has argued, among other things, that "Fall in oil prices is good for Pakistan. It is good for both inflation and external account outlook. Central banks around the world are cutting rates. Carry trade is becoming more lucrative. But there is some outflow, in line with emerging market trends. Current account savings may improve. Inflation outlook is better. With no shift in underline credit risk of Pakistan, there is a case of rate cut by 50 bps in March."

Here I wish to disagree with him insofar as the earlier two points of his argument are concerned. Firstly, any fall in oil prices is always good for oil importing countries such as Pakistan and India. Secondly, nothing can be said with any measure of certainty that a significantly reduced trade deficit on account of a decline in oil prices will help tame inflation significantly. A case in point is current higher inflation despite a historic improvement in external sector. Unlike mathematics, economics is not exact science.