ISLAMABAD: Commodity price shocks from the Iran war have exposed Pakistan's external vulnerabilities and could derail the country's $7 billion International Monetary Fund (IMF) loan program, global economic advisory firm Oxford Economics said in a report.
The report, released on April 29, 2026, highlights that rising oil and commodity prices due to the conflict are straining Pakistan's balance of payments. Pakistan, which imports most of its energy, faces increased import costs that could widen its current account deficit and pressure foreign exchange reserves.
Oxford Economics noted that Pakistan's IMF program, approved in 2024, requires strict fiscal discipline and structural reforms. The external shocks could make it harder for Pakistan to meet program targets, potentially delaying disbursements or requiring program renegotiation.
Pakistan's economy has been under stress, with inflation and debt levels high. The Iran war adds to these challenges, as global oil prices have surged by over 20% since the conflict began in March 2026, according to data from the World Bank.
