Pakistan”s fragile economic stability is under severe threat from the escalating conflict involving the United States, Israel, and Iran, a prominent business leader warned on Tuesday, citing significant risks to energy supplies, inflation, and the livelihoods of millions of overseas workers.
Omar Butt, President of the Pakistan Business Network (PBN), commended the nation’s civil and military leadership for their diplomatic handling of the crisis, stating their approach has bolstered the country”s global stature while helping to mitigate severe financial repercussions.
He lauded Prime Minister Shehbaz Sharif and Chief of Army Staff Field Marshal Asim Munir for their ‘principled and courageous’ navigation through the highly complex regional tensions. Butt noted that a steadfast focus on dialogue and neutrality has enabled Pakistan to emerge as a credible mediator.
The business leader revealed that Pakistan is positioning itself at the forefront of mediation efforts, with indications that Islamabad may soon host direct negotiations between senior US and Iranian officials. This initiative has reportedly involved high-level military contacts with Washington alongside parallel diplomatic engagement with Tehran.
Butt emphasised that the economic stakes remain exceptionally high. The country shares a 900-kilometre border with Iran and is heavily reliant on Gulf shipping lanes for its energy imports, sourcing approximately 90 percent of its oil from the volatile region.
Any further disruption to these crucial maritime routes could trigger a surge in fuel prices, inflate the national import bill, and intensify inflationary pressures at a time when Pakistan is operating under an IMF stabilisation programme.
The PBN president also highlighted the potential peril faced by millions of Pakistani expatriates working in Saudi Arabia and other Gulf nations, underscoring the direct link between regional stability and household incomes back home.
He acknowledged that Islamabad’s diplomatic strategy has helped sustain a degree of economic steadiness, permitting trade and investment to continue despite the external uncertainties. Butt suggested Pakistan’s evolving mediatory role could enhance its international credibility and foster deeper cooperation with global partners.
However, the nation’s external position remains vulnerable to oil price fluctuations and currency pressures. Policymakers are closely monitoring the situation and developing contingency plans to manage potential spikes in energy costs and protect foreign exchange reserves.
While continued de-escalation could help lower inflation and boost market confidence, particularly in energy-dependent sectors, Butt cautioned that a prolonged conflict could undermine recent macroeconomic stabilisation efforts and severely hinder the country”s economic recovery.