Pakistan’s External Economic Stress Index fell to -6.12 in August 2026, as stronger global activity, remittances and foreign investment improved the external outlook despite persistent oil price and geopolitical risks.
KARACHI, October 13, 2026: The Institute of Cost and Management Accountants of Pakistan (ICMAP) has reported an improvement in Pakistan’s external economic environment ahead of the upcoming Monetary Policy Committee (MPC) meeting.
According to ICMAP’s latest Pre-Monetary Policy Outlook, the External Economic Stress Index (EESI) declined to -6.12 in August 2026, indicating that supportive global conditions outweighed external vulnerabilities during the period.
The index, developed by ICMAP, assesses Pakistan’s exposure to international economic shocks through five indicators: global economic growth, international oil prices, food prices, financial market volatility and global supply-chain pressures.
The report attributes the improved outlook to stronger global economic activity, resilient remittance inflows and improving foreign direct investment trends. These developments supported export prospects, investor confidence and the country’s external account.
However, ICMAP warned that significant risks remain. Rising international oil prices, geopolitical uncertainty and supply-chain disruptions could increase Pakistan’s import bill, intensify inflationary pressures and undermine macroeconomic stability.
Pakistan’s dependence on imported energy makes the economy particularly vulnerable to adverse movements in global oil markets. Renewed international disruptions could therefore reverse some of the recent improvement in external conditions.
To manage these risks, ICMAP recommended stronger monitoring of the external sector, regular stress-testing of financing requirements and improved foreign exchange liquidity planning.
The institute also called for scenario-based assessments of global risks to be incorporated into monetary policy decisions, enabling policymakers to respond more effectively to changing international conditions.
ICMAP emphasised that, although the latest EESI reading points to a more favourable external environment, maintaining economic stability will require prudent policymaking and continued vigilance.
The institute said a balanced monetary policy, supported by effective external-sector management, would be essential to safeguarding macroeconomic stability and sustaining Pakistan’s economic growth in the coming months.