The government lack of ability to handle the changing circumstances and reduce potential risk for the already unstable economy concerned the corporate sector in addition to its social and political effects.
Although Pakistani business circles are hoping for an early ceasefire, they cannot rule out the possibility that fighting may spread to include the region that produces electricity, which is vital for shipping and is the main source of remittances and economic support for Pakistan.
The possible effects of rising anti-Western sentiment in Pakistan on Eurocentric trade and the operations of large American and European corporations in a number of Pakistani sectors, however, were minimized.
The CEO of the Pakistan Business Council (PBC), Ehsan Malik, voiced concern about the possibility of future increases in the already high cost of conducting business.
Unlike the Russia-Ukraine war that led to spiralling oil prices, the Israel-Palestine war may have a limited economic impact
The primary effect on an economy like Pakistan that depends on gasoline imports is higher costs, which luckily have only reached about 6% so far. This is a significant decrease from the Brent price, which temporarily rose above $100 per barrel after the start of the conflict in Ukraine. It seems like regional countries are taking their time to decide what to do next, even if it is impossible to completely rule out the potential of the Middle East crisis getting worse.
There is little chance that an Arab oil embargo similar to the one in 1973 will occur. It seems improbable that Egypt would obstruct Suez Canal commerce. Still, a nation with a vulnerable economy needs to be on guard and prepare for all eventualities with backup plans.
According to sources in Islamabad, certain State Bank and Planning Ministry officials are keeping a careful eye on events in the Middle East and developing plans for various contingencies to lessen any negative effects on the nation economy.
A senior executive stated in private, "At this time, we are keeping an eye on price movement in the global markets and the possibility of supply disruptions, which could impact economic activity, especially any slowdown in remittances."
The main impact on a fuel import-reliant economy like Pakistan is increased cost, which, fortunately, has remained limited to around 6pc thus far
M Abdul Aleem, Secretary General, Overseas Chamber of Commerce and Industry, spoke against armed conflicts without taking a clear position on the bloody war in the Middle East. He was primarily worried about the impact on inflation and the flows of foreign direct investment (FDI) from the West in countries like Pakistan.
Worldwide conflicts always lead to interruptions. There is no denying the effects of the Russia-Ukraine war, especially with regard to food and fuel prices. The Middle Eastern countries are major contributors to Pakistan economy and are the world largest suppliers of oil. But the World Bank, the IMF, China, and some Middle Eastern nations are all very important to Pakistan economic stability.
In addition, Pakistan has historically benefited from Western FDI. Consequently, Pakistan faces difficulties as a result of the growing turmoil in the Middle East. We might see further increases in the price of goods and services, especially given the expected increase in oil costs and the relative weakness of the currency. Pakistan past position on the conflict raises the possibility that some Western brands may suffer from unfavorable public perception. Mr. Aleem stated, "It is anticipated to be symbolic with little effect on the business.
Economist Ahmed Qadir highlighted that the Gulf crisis may have an effect on remittance inflow from the region and that Pakistan economy is extremely exposed to changes in oil prices.
