Hormuz Crisis Drags Pakistan GDP Growth to 2.0% in June Quarter

Pakistan's economy grew 2.0% in the quarter ended June, the Pakistan Bureau of Statistics (PBS) reported on Monday — less than half the pace analysts expected and the clearest number yet on what the Strait of Hormuz crisis costs import-dependent economies.

The quarter, the fourth of fiscal year 2026, marks a sharp deceleration from the preceding nine months. Growth in April through June ran at less than half the earlier rate, per the official data. Two forces did the damage: soaring energy prices and the loss of regular LNG supply from Qatar.

Why does a Gulf shipping chokepoint hit Islamabad's GDP?

The Strait of Hormuz is the passage for roughly a fifth of the world's oil and — critically for Pakistan — the sea lane for Qatari LNG cargoes into Karachi-area terminals. When the crisis disrupted that route, Pakistan lost its regular supply of Qatari gas. Power generation and industry, both lean heavily on imported LNG, took the hit directly.

The compounding effect is straightforward. Crude-linked energy prices climbed. Fuel-import costs rose in step. Industry paid more for power and feedstock at the same time supply tightened. The result shows up in the 2.0% print.

What was the recovery supposed to look like?

Before the crisis, Pakistan was clawing back from the brink under an International Monetary Fund (IMF) program. The country had been described as staging a tentative recovery — tentative because the external accounts left little room for an energy price shock.

That shock arrived. GDP growth came in well below analyst estimates for the June quarter. The PBS data quantifies the gap; it doesn't flatter it.

Worth noting what the release doesn't say: PBS gave no sector-level breakdown in the headline figure, no revision history, and no guidance on Q1 FY2027. The ministry has yet to say whether full-year FY2026 growth targets will be formally revised. Treat any near-term forecast from Islamabad with caution until those details land.

Can the IMF program absorb this?

The program's assumptions were built on cheaper energy and functioning LNG imports. Both assumptions are now under strain. Analysts flagged the miss against consensus estimates; the government itself has not commented on how the quarterly slowdown maps against IMF fiscal targets.

Pakistan's import bill grows with every dollar of Brent-linked pricing. That squeezes the current account, which in turn pressures the rupee, which raises import costs again. The loop is familiar to anyone who covered the 2022-23 near-default. The difference now is that the trigger is external supply, not domestic policy failure.

The recovery was real but thin. A single quarter this far below expectations tests whether the IMF anchor holds without new measures.

What to watch next

Three items move this story from here:

• Q1 FY2027 data (July–September): the first quarter fully inside the crisis period, expected from PBS in the autumn. It will show whether 2.0% was a trough or a trend.
• Qatar LNG resumption: any signed cargo schedule restored through Hormuz would relieve the power-sector bottleneck. No resumption timeline has been announced.
• IMF review: the next program checkpoint will reveal whether growth and fiscal targets get renegotiated against the new energy-price baseline.

The June-quarter number is the first hard evidence that the Hormuz disruption is exporting itself into South Asian economies that can least afford the freight.