Topline Pakistan Research has released a significant report on rising oil prices, highlighting their implications for Pakistan’s economy. The analysts project that inflation will average 9-10% over the next 12 months, potentially rising to 10-11% if oil prices reach $120/barrel. GDP growth forecasts for FY27 have been revised down to 2.5-3.0%, while FY26 remains at 3.5-4.0%.

The current account deficit is expected to stay below $3.5 billion for FY27, but could exceed $8 billion if import controls slip. The fiscal deficit is likely to remain around 4.0-4.5%. Currency depreciation for FY27 is anticipated to be 5-6%.

The Pakistan stock market was the third-worst performer globally in Q1 2026, down 15% due to high reliance on imported oil. Current petroleum imports are projected at $15 billion for FY26, accounting for 22% of total imports. Top picks under current conditions include OGDC, PPL, MARI, FFC, ENGROH, MEBL, BAFL, and HUBC.

The index target has been revised down to 187,000 from 203,000 due to a rise in the risk-free rate to ~13%. Non-oil imports are expected to hit $48-50 billion in FY26, with a potential 8% decline in FY27 due to government intervention. Remittances from the GCC are projected to dip by 10%, while exports may decline by 4% in FY27.

With the above base-case assumptions, we arrive at FY27 CA estimates of a deficit of US$3.5bn, or 0.8% of GDP.

No administrative measures case (FY27F/2): If the government is late in taking administrative measures for non-oil import curtailment, the CA estimates could rise to over US$8bn, or 1.8% of GDP. We have assumed 2% growth in non-oil imports in this case.