EXTERNAL shocks have repeatedly shaped Pakistan’s economic trajectory. From oil crises to global financial turbulence, the pattern is a familiar one: rising import costs weaken the balance-of-payments, inflation accelerates and pressure mounts on the exchange rate. The latest tensions in the Middle East threaten to trigger a similar sequence at a moment when Pakistan’s policy space is already constrained by an IMF stabilisation programme. The Middle East crises, combined with Pak-Afghan border tensions and persistent security challenges in the tribal districts and Balochistan, adds another layer of economic pressure just as the country had begun to achieve a measure of stability.
The most immediate risk lies in the trade balance as c
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