Pakistan's fragile economic recovery faces renewed risks as tensions between Israel and the United States and Iran threaten to escalate into a broader regional conflict. Economists warn that any disruption to Middle Eastern oil supplies could sharply raise global crude prices, increasing Pakistan's import bill and putting pressure on its current account and currency.

The country relies heavily on fuel imports from Gulf nations and on worker remittances projected at 41 billion dollars this fiscal year. Officials caution that while border tensions with Afghanistan are primarily a security concern, a wider Middle East war could significantly reduce remittance flows and weaken investor confidence, undermining recent macroeconomic gains achieved under a 7 billion dollar International Monetary Fund program.

Although inflation has eased to single digits and the current account recently posted a modest surplus, analysts say a sustained surge in oil prices could reverse that progress, fuel inflation, and limit the central bank's flexibility on interest rates. Aviation has already been affected, with flight suspensions and rerouting leading to financial losses for domestic carriers.

Experts do not foresee an immediate balance of payments crisis but warn that prolonged instability could trigger capital outflows and strain fiscal space, keeping Pakistan vulnerable as regional tensions unfold.