The ongoing US-Iran conflict and disruptions around the Strait of Hormuz are adding to economic pressures on Pakistan, according to the World Bank’s latest regional economic update. The report highlighted the impact of higher energy costs on countries already facing financial and economic challenges.
According to the World Bank, gasoline prices in Pakistan have increased by more than 40%, while diesel prices have also risen by over 40%. Higher fuel costs can place additional pressure on transportation, businesses and household budgets, potentially increasing the cost of goods and services.
The World Bank also identified Pakistan among countries facing significant debt and financing pressures. Rising living costs, inflation, currency depreciation and earlier economic shocks have contributed to worsening poverty levels, creating further challenges for households and the wider economy.
Despite these pressures, the report also pointed to opportunities emerging from artificial intelligence. Pakistan is positioning itself as a talent-led exporter of AI services, supported by its growing pool of technology professionals and digital workers.
The development of AI-based services could provide new opportunities for exports, employment and foreign exchange earnings if Pakistan is able to expand its digital skills and strengthen its technology ecosystem.
The World Bank’s assessment highlights a difficult economic environment for Pakistan, with higher energy costs and financial pressures creating challenges, while the growing global demand for AI services presents a potential area for future economic growth.
