Pakistan’s struggling economy is likely to remain under sustained pressure, with double-digit inflation expected to persist if global oil prices continue to surge amid the ongoing Middle East crisis, according to a report by Dawn.Topline Securities Ltd, in its latest “Pakistan Strategy” report released Saturday, provided a grim assessment of the impact of rising energy costs and regional instability on the country’s economy and stock market. The brokerage described the situation as “prolonged and evolving,” warning that any improvement depends on an immediate and peaceful resolution to the conflict.The report, asx cited by ANI, said that under current conditions, inflation could average between 9 and 10 per cent over the next year, with fourth-quarter FY26 figures expected to exceed 11 per cent. These projections are based on oil prices at $100 per barrel, with every $10 increase adding around 50 basis points to inflation. If oil rises to $120 per barrel, annual inflation could reach 11 per cent, potentially forcing the State Bank of Pakistan into further aggressive interest rate hikes.The rising inflationary pressure is expected to slow economic growth. Topline Securities has cut its GDP forecast for FY27 to between 2.5 and 3.0 per cent from an earlier estimate of 4.0 per cent. Growth for FY26 is projected at 3.5 to 4.0 per cent, but the industrial sector remains vulnerable, with growth possibly dropping to just 1 per cent from nearly 4 per cent.According to Dawn, the current account deficit for FY27 could exceed $8 billion if the government fails to maintain strict import controls, worsening pressure on foreign exchange reserves. The fiscal deficit for FY26 is expected to range between 4.0 and 4.5 per cent of GDP, exceeding targets set by the International Monetary Fund.The Pakistan Stock Exchange has been among the worst-performing markets globally, reflecting the country’s heavy reliance on imported energy. Petroleum imports are projected to reach $15 billion in FY26, while Pakistan imports around 85 per cent of its energy needs. This dependence contributed to a 15 per cent decline in the market during the first quarter of the year.The economic outlook is further affected by a projected 3.5 per cent decline in remittances, with inflows from the Gulf Cooperation Council region expected to fall by 10 per cent. Exports are also forecast to decline by 4 per cent.On the currency front, the Pakistani rupee is expected to weaken to 298 against the US dollar by FY27. Persistent conflict could push depreciation beyond historical averages, increasing pressure on supply and demand.Dawn noted that while domestic exploration firms may eventually increase production to reduce reliance on liquefied natural gas imports, the near-term outlook remains marked by high interest rates, rising urea prices, and a growing dependence on emergency administrative measures to prevent a deeper economic crisis.

OPEC+ is set to agree on Sunday a modest oil output hike, sources said, but the increase will remain largely on paper as long as the United States-Iran war continues to disrupt Gulf oil supplies.

Seven OPEC+ countries have agreed to raise oil output targets by about 188,000 barrels per day in June, the third consecutive monthly increase, the sources said and a draft OPEC+ statement showed.

The move is designed to show the group is ready to raise supplies once the war stops. It is also pressing on with plans to raise output targets despite the departure of the United Arab Emirates from the group this week, sources said.

Read: Oil prices trim gains after UAE exits OPEC, OPEC+

The seven members meeting on Sunday are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. With the UAE leaving, OPEC+ includes 21 members including Iran, but in recent years only the seven nations plus the UAE have been involved in monthly production decisions.

The Iran war, which began on February 28, and the resulting closure of Hormuz have throttled exports from OPEC+ members Saudi Arabia, Iraq and Kuwait, as well as from the UAE. Before the conflict, these producers were the only countries in the group able to raise production.

The output hike will remain largely symbolic until shipping through the Strait of Hormuz reopens and even then it will take several weeks if not months for flows to normalise, oil executives from the Gulf and global oil traders have said.

Read More: UAE reviewing multilateral ties after OPEC exit but rules out more departures, official says

The disruption propelled oil prices to a four-year high above $125 per barrel as analysts begin to predict widespread jet fuel shortages in one to two months and a spike in global inflation.

Crude oil output from all OPEC+ members averaged 35.06 million bpd in March, down 7.70 million bpd from February, OPEC said in a report last month, with Iraq and Saudi Arabia making the biggest cuts due to constrained exports.

OPEC+ seven members will meet again on June 7, the draft statement said.