External sector faces instability amid Middle East crisis

ISLAMABAD: As the conflict in the Middle East escalates, Pakistan’s Planning Commission has cautioned about possible economic impacts on the country, including increased energy costs, strain on remittance inflows, and potential interruptions to exports and financial stability.

The ministry warned that instability in the region, especially around the strategic Strait of Hormuz, could drive up global oil prices and sharply increase Pakistan’s import costs, given the country’s heavy dependence on petroleum imports from the Middle East, according to the Ministry of Planning’s Monthly Development Update for March.

Such developments could also fuel domestic inflation, raise production and freight costs for exporters, and place additional pressure on the exchange rate and fiscal position, according to the report released here on Saturday.

At the same time, prolonged conflict could affect remittance inflows from Gulf countries, where millions of Pakistani workers are employed, and create uncertainty for Pakistan’s exports to the region.

Planning Commission report warns of surge in inflation, import costs, exchange rate pressures

Planning Commission report warns of surge in inflation, import costs, exchange rate pressures

Rising oil prices driven by disruptions around the strategic Strait of Hormuz, through which around 20 percent of global oil passes, could significantly increase Pakistan’s import bill, as petroleum products........

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