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KARACHI: Regional instability continues to influence market sentiment, negatively impacting Pakistan’s domestic bond and equity markets and foreign direct investment, all of which declined at the end of FY26.
Several economic stakeholders were unsure whether the Gulf turmoil, which has recently paused, could last longer.
They said all countries, except Israel, hoped for a permanent end to the Gulf war against Iran, but the business community was looking at the situation the other way.
“Even if the war does not start in the near future, the uncertainty is high enough to keep foreign investors away from the country, such as Pakistan, which faces serious problems with its external account and depends largely on friendly countries and international donors to avoid default,” said a senior banker.
