Middle East | News

While macroeconomic stability improved in the first half of fiscal year 2026, the war in the Middle East poses risks to the economic outlook amid heightened uncertainty, the State Bank of Pakistan (SBP) said on Tuesday. The SBP released its Half Year Report 2025-26 (The State of Pakistan’s Economy) on Tuesday, showing that Pakistan’s macroeconomic stability strengthened in the first half of the fiscal year despite headwinds from uncertainty regarding global trade and domestic floods. However, the report noted that the war in the Middle East poses “significant risks to the macroeconomic outlook”, as supply chain disruptions are likely to affect the inflation trajectory, external trade and remittance flows, and the country’s economic activity, according to an SBP press release. Discussing the outlook for FY26, the report notes that the latest data on high-frequency indicators — including Purchasing Managers’ Index (PMI), LSM and construction — suggests that economic activity maintained the momentum through Febr...

Deputy Prime Minister and Foreign Minister Ishaq Dar held a telephone conversation with Faisal bin Farhan Al Saud to discuss the evolving situation in the Middle East and other issues of mutual interest.

Indian Prime Minister Narendra Modi on Sunday urged the people of to cut down on petrol and diesel consumption amid supply disruptions due to the Middle East war. India is one of the few countries in the region that has not increased the prices of petrol and diesel for domestic consumers or rationed supplies. But it has increased prices of liquefied petroleum gas (LPG) — a primary cooking fuel in this country — after disruptions following the US-Israeli strikes on Iran, which led to Iran’s near-total blockade of the strategic Strait of Hormuz. “We have to reduce our use of petrol and diesel. In cities with metro lines, we should try to travel by metro … If we must use a car, then we should try to car pool,” he said, addressing a gathering in southern Telangana state. He added that restrictions on use were also necessary to save foreign currency spent on fuel imports. “We must also place a strong emphasis on saving foreign exchange, as petrol and diesel have become so expensive globally.” Modi also urged peopl...

China’s Foreign Minister Wang Yi said Beijing would play a “greater role” in ending hostilities in the Middle East during talks with his Iranian counterpart on Wednesday, a week before US President Donald Trump is due to meet Xi Jinping. China is a key customer for Iranian oil, defying sanctions imposed by the United States, and is directly affected by the blockage of the Strait of Hormuz, bordered by Iran. Beijing has quietly engaged in efforts to resolve the weekslong crisis and its diplomacy is credited with playing an important role in the fragile ceasefire agreed between Washington and Tehran. China “will work harder to ease tensions and end the fighting, continue to support the launch of peace talks, and play a greater role in restoring peace and tranquillity to the Middle East”, Wang told Iran’s Abbas Araghchi in Beijing. “China considers that a complete cessation of fighting must be achieved without delay, that it is even more unacceptable to restart hostilities, and that continuing to negotiate remai...

Ukrainian President Volodymyr Zelensky has condemned Iran's strikes on the United Arab Emirates, calling them reckless, and has instructed diplomats to deepen security partnerships with countries in the Middle East.

Prime Minister Shehbaz Sharif called on PML-N supremo Nawaz Sharif at their Jati Umra residence in Lahore on Sunday, a statement issued by the PM’s Office (PMO) said, adding that the Middle East conflict and the political situation in the country were discussed during the meeting. Punjab Chief Minister Maryam Nawaz was also present on the occasion. The PMO statement said the premier briefed Nawaz on the “situation in the country” and exchanged views on the political situation. He further informed him about the situation in the Middle East and Pakistan’s efforts for the restoration of peace in the region, the statement added. The conflict in the Middle East, which is now more than two months old, began with US-Israeli strikes on Iran on February 28. And while hostilities have paused following a Pakistan-brokered two-week ceasefire on April 8 — which has been extended indefinitely by US President Donald Trump — the world continues to face its consequences. Pakistan’s civil and military leadership has been engag...

Deputy Prime Minister and Foreign Minister Ishaq Dar on Saturday discussed the regional situation in the Middle East with Kuwait’s Foreign Minister Sheikh Jarrah Jaber Al-Ahmad Al-Sabah, the Foreign Office (FO) said. In a statement, the FO said that the two leaders “discussed the evolving regional situation and exchanged views on its wider economic implications”. Dar underscored Pakistan’s “continued efforts to promote constructive engagement and diplomacy in support of peace and stability in the region and beyond”. “Foreign Minister Sheikh Jarrah commended Pakistan’s sincere efforts aimed at fostering lasting peace and security for the Ummah as well as the wider international community,” the FO statement noted. Both sides reaffirmed the strong fraternal ties between Pakistan and Kuwait and agreed to remain in close contact, it said. Dar’s call with his Kuwaiti counterpart comes amid the crisis in the Strait of Hormuz — a key shipping route in paralysis since the US-Israel war on Iran began on February 28. Th...

Bitcoin dropped under $75,000 after FOMC minutes showed the US Federal Reserve holding interest rates and expressing slight concerns over inflation and the war in Iran. Bitcoin (BTC) extended its two-day decline on Wednesday after the Federal Open Market Committee (FOMC) minutes confirmed the Fed’s decision to hold “the target range for the federal funds rate at 3-½ to 3-¾ percent.”  While the Fed maintains its goal of achieving “maximum employment and inflation at the rate of 2 percent over the longer run,” the FOMC minutes cited the “developments in the Middle East” as factors fueling an environment of “uncertainty” and the Fed stressed its desire to maintain optionality as it evaluates the “risks to both sides of its dual mandate.”  FOMC minutes with new statements in red. Source: CNBC Read more

Prime Minister Shehbaz Sharif on Wednesday said that the country’s weekly oil bill has reached $800 million due to the ongoing oil crisis arising from the Middle East conflict. Global fuel prices have skyrocketed over the past two months as shipping through the Strait of Hormuz remains paralysed since the US and Israel launched joint strikes on Iran on February 28. Addressing a meeting of the federal cabinet today, PM Shehbaz commended the efforts of Petroleum Minister Ali Pervaiz Malik for tackling the fuel crisis resulting from the Iran war, stating that the situation now appeared “satisfactory”. On that note, the prime minister remarked that fuel prices in the global markets had risen sharply, noting that “our weekly pre-war oil bill was around $300m, and today it is up to $800m”. He further shared that the country’s fuel consumption “had lessened compared to previous weeks”, stressing that the situation was being monitored regularly. “Consultations are also being held with provinces to extend fuel subsidi...

Ukraine is conducting astute diplomacy in the Middle East, which will have significant positive consequences for Kyiv.

ISLAMABAD - Prime Minister Shehbaz Sharif Monday received a telephone call from António Costa, President of the European Council and during their cordial conversation, the two leaders exchanged views on the current situation in the Middle East.

ISLAMABAD: The government said on Monday that Pakistan’s economic growth would be affected during the current and next fiscal years due to an almost 20 per cent cut in development budget for fuel subsidies and inflationary impacts of global supply chain disruptions amid the war in the Middle East. “This (cut in development budget) will have a negative impact and, coupled with international oil prices and inflation, will result in economic slowdown and affect our growth target of 4.2pc” for the current year, Planning Minister Ahsan Iqbal said while addressing a news conference. This is the first official confirmation of lower than targeted economic growth, although international lenders have projected the growth rate between 3.2pc and 3.5pc. Responding to the question, Iqbal said that the Public Sector Development Programme (PSDP) for the current year had been slashed by Rs173bn to Rs837bn from the Rs1.01 trillion target set in the budget. He said PSDP was reduced to finance the Prime Minister’s Austerity Fund...

The Pakistan Stock Exchange (PSX)’s benchmark index KSE-100 plunged by over 1,700 points on Monday amid uncertainty over the Middle East conflict. The KSE-100 declined by 1,742.31 points or 1 per cent to close at 172,196.70 from the previous close of 173,939.01 points. The KSE-100 rose to an intraday high of 174,523.76 points at around 11:55am, then declined to an intraday low of 169,226.56 points at 1:05pm, before settling at 172,196.70. According to Topline Securities, the trading began on a “subdued note, reversing the previous session’s upward momentum, with the benchmark index declining to an intraday low of 4,712 points”. “Investor sentiment remained cautious amid escalating geopolitical tensions,” it said, citing increased concerns due to the US seizure of an Iranian-flagged cargo vessel in the Strait of Hormuz and uncertainty over Iran’s participation in the 2nd round of US-Iran talks in Islamabad. “Earlier indications of potential diplomatic engagement, including the possibility of a US delegation vi...

China’s President Xi Jinping met with Russian Foreign Minister Sergei Lavrov on Wednesday, Chinese state media said, as a string of leaders of countries impacted by the Middle East war flock to Beijing. Lavrov joins Spanish Prime Minister Pedro Sanchez, Abu Dhabi’s Crown Prince Mohamed bin Zayed Al Nahyan and Vietnam’s President To Lam in meeting with Xi this week. The Russian diplomat told a news conference after meeting Xi that Moscow could “compensate” for China’s energy shortages as shipping through the Strait of Hormuz remains choked by the Iran war. Xi, meanwhile, has sought to position China as a mediator and stable partner in the face of the US- and Israeli-led conflict. Xi told Abu Dhabi’s crown prince on Tuesday that China would play a “constructive role” in promoting peace talks in the Middle East. In talks with Spain’s Sanchez, Xi warned that the world was facing “chaos and turmoil” and “a contest between justice and force”, urging closer cooperation. The Spanish prime minister, meanwhile, welcome...

The Prime Minister of the Netherlands, Rob Jetten, met with the President of the United States, Donald Trump, in Washington - they discussed the war in Ukraine and in the Middle East.

A deterioration of the security situation in the Middle East may occur after mid-April amid an increase in U.S. military presence in the region.

China opposes any escalation in Middle East

Emmanuel Macron held a phone call with his Turkish counterpart Recep Tayyip Erdoğan, during which they discussed Russia’s war against Ukraine and the situation in the Middle East.

WASHINGTON: The war in the Middle East will have a cascading impact on the global economy, even if the fragile ceasefire announced by US President Donald Trump takes hold, World Bank President Ajay Banga told Reuters in an interview on Friday. And the damage will be far more serious if the ceasefire fails and the conflict escalates, he said. Banga on Tuesday said global growth could be lowered by 0.3 to 0.4 percentage points in a baseline scenario, with an early end to the war, and by as much as 1 percentage point if it endures. Inflation could increase by 200 to 300 basis points, with a much higher impact of up to 0.9 percentage points if the war continues, he said. The war, which has killed thousands of people across the Middle East, has sent the price of oil up by 50pc while disrupting supplies of oil, gas, fertiliser, helium and other goods, as well as tourism and air travel. The two-week ceasefire announced by Trump appears tenuous, with Israel and Iran continuing strikes. Iran said on Friday that blocke...

Islamabad - The war in the Middle East will have a cascading impact on the global economy, even if the fragile ceasefire announced by US President Donald Trump takes hold, World Bank President Ajay Banga tells Reuters in an interview.