ISLAMABAD: Pakistan is in a stronger position to withstand the economic impact of the ongoing Middle East war than it was during the 2022 oil shock, according to Moody’s analyst Grace Lim.
Lim said Pakistan has strengthened its economic stability over the past two years by reducing inflation, stabilizing the exchange rate and building up foreign exchange reserves.
These improvements have provided the country with stronger buffers to absorb higher energy costs and other economic pressures arising from the US-Iran conflict, she added.
The assessment comes as global oil prices rise amid renewed fighting in the Middle East. Pakistan has already increased the price of petrol by Rs. 12.90 per litre and high-speed diesel by Rs. 3.72 per litre.
Brent crude climbed 2.06% to around $99 per barrel on Tuesday, while US West Texas Intermediate (WTI) increased 3.2% to $94.41 per barrel.
The conflict has also heightened concerns about potential disruptions to global oil supplies through the Strait of Hormuz, a key route for international energy shipments.
Unlike in 2022, when the Russia-Ukraine war triggered a significant global energy price shock, Pakistan now has stronger external buffers, including improved foreign exchange reserves and greater exchange-rate stability.
According to Moody’s, these improvements should help Pakistan manage higher energy import costs and reduce the severity of the economic impact compared with the previous oil shock.
