how FATF placing Pakistan on a watchlist could hurt its economy
Being on the global watchlist for terror financing could lead to banks pulling out, say experts. This could have dire consequences for Pakistan’s financial sector, and Pakistan’s overall economy. A number of international banks may decide to leave the country if this happens. As per reports, amidst intense pressure from regulators to take steps against money laundering and terrorist financing, a number of banks have been leaving from high-risk countries in recent time.
Another huge impact could be a fall in foreign transactions and foreign currency inflows which may lead to further widening of Pakistan’s large current account deficit (CAD). Pakistan’s economy was saved by International Monetary Fund (IMF) in 2013 after a balance-of-payments crisis in the country
If the country is included in FATF’s black list, Pakistan’s stock market is also likely to fall at a greater speed, impacting the country’s economy. The country may also see downgrade by a number of lenders like IMF, ADB, World Bank among others.
In case Pakistan is included in the blacklist, its image across the country will be dented, but a number of countries may also think about their trade relations with the country, which may also impact country’s economy.

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