AS the confrontation between the US-Israel combine and Iran escalates across the Middle East, increasing regional instability is no longer a mere geopolitical concern for Pakistan; it now has tangible implications for its fragile economy.
With all signs pointing to a prolonged conflict, the prospects of sustained regional instability threaten to strip away the veneer of economic recovery that the government frequently touts as its key achievement.
A potential disruption in remittances poses yet another major risk. These inflows have long financed Pakistan’s burgeoning import bill amid stagnating exports, and any prolonged conflict that undermines them will further strain an already fragile balance-of-payments position.
Ultimately, the Iran-linked instability highlights the fact that Pakistan’s macroeconomic resilience remains fragile.
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