Hormuz shock could hit Pakistan with inflation and import stress

A new study linked to the Pakistan Institute of Development Economics has warned that Pakistan remains highly exposed to any disruption in the Strait of Hormuz, one of the world's most critical energy corridors.

The report says even a mild global oil supply shock could quickly raise fuel prices, reverse disinflation, push up transport and food costs, and deepen pressure on the country's external account. Researchers noted that energy imports account for more than a fifth of Pakistan's total import bill, making the economy especially vulnerable to sudden price spikes.

The study outlines several risk scenarios. Under a mild shock, inflation could move close to 8.8% within six months. Under more severe conditions, inflation could climb past 10% and potentially exceed 12%, creating broader macroeconomic stress.

The findings come at a time when geopolitical tensions around the Gulf are already rattling global markets, underscoring how external energy disruptions can rapidly translate into domestic economic pain for Pakistan.