Pakistan, July 31 -- Rising tensions between the United States and Iran have renewed concerns over higher global energy prices, increasing inflation pressures and potential disruptions to international trade, according to Pakistan's Ministry of Finance.

Read More: US-Iran tensions push oil prices to months-high levels

In its latest monthly economic outlook report, the ministry warned that escalating geopolitical instability in the Middle East could pose significant risks to Pakistan's inflation outlook and external sector during fiscal year 2026-27. The report noted that renewed uncertainty in the region could affect global energy markets, financial systems and trade flows.

The ministry expects inflation to remain elevated in the short...