Karachi Pakistan : Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, and Former Provincial Minister Information Technology, today expressed grave concern over the escalating conflict between the United States, Israel, and Iran, warning of an unprecedented global energy shock that could derail Pakistan’s fragile economic recovery. He stated that with global Brent crude prices surging past $105 per barrel and imported LNG prices reaching $8.72 per mmBtu following severe disruptions in the Strait of Hormuz, urgent and decisive policy measures are required to insulate the national economy. Mian Zahid Hussain noted that the recent steep hike in domestic retail fuel prices is merely the first tremor of a broader macroeconomic shock that threatens to undo recent stabilization efforts which can shrink Pakistan’s GDP by 1%.
The renowned business leader highlighted that Pakistan’s most critical vulnerability lies in its external sector. He cautioned that the national economy is confronting a looming external shock over the next fiscal year, driven by a projected 25 to 30 percent increase in the petroleum import bill alongside skyrocketing global shipping and insurance premiums. Furthermore, with a significant majority of Pakistan’s remittances originating from the Middle East, any regional economic slowdown could severely curtail foreign inflows. This potential reduction of billions of dollars, he warned, threatens to vastly widen the current account deficit and put unbearable pressure on the Pak Rupee.
Against this volatile geopolitical backdrop, Mian Zahid Hussain emphasized that the successful completion of the ongoing International Monetary Fund (IMF) review is no longer merely a fiscal target but a matter of absolute national economic survival. He noted that recent virtual discussions led by the IMF mission regarding the next tranche of the Extended Fund Facility have yielded considerable progress, with program implementation remaining broadly aligned with commitments. However, he stressed that the IMF is now rigorously assessing the impact of the Middle East war and volatile energy prices on Pakistan’s balance of payments before authorizing further disbursements.
To secure the impending release of vital tranche from the IMF and maintain fragile investor confidence, the former Provincial Minister urged the government to remain steadfast in its structural reform agenda. He categorically stated that according to the IMF, maintaining a tight monetary policy to combat resurgent inflation, sustaining fiscal consolidation, and aggressively pursuing energy sector reforms—specifically timely tariff adjustments and governance overhauls to arrest circular debt—are absolute non-negotiables but the business community desires to cut the policy rate to reduce the cost of doing business, which would result in providing jobs to the masses. Navigating this immense global crisis requires unity, foresight, and an unwavering commitment to financial discipline to shield domestic industries and the common man from the ensuing global economic fallout, he added.
