CASS Webinar Warns of Grave Economic Fallout from Israel-Iran Conflict
Dr. Manzoor Ahmad discussed the potential ripple effects of such a conflict on Pakistan’s already fragile economy.
ISLAMABAD – Experts at a high-level webinar organized by the Centre for Aerospace & Security Studies (CASS), Islamabad, warned that neither Iran nor Israel is capable of sustaining a prolonged conflict, and any deeper U.S. involvement could trigger spiraling global costs. Titled “The Economic Fallout of Israel-Iran Conflict,” the event featured distinguished international and national experts who examined the potential economic and security repercussions of escalating tensions between the two countries.
The panel included Dr. Einar Tangen, Senior Fellow at the Taihe Institute in Beijing; Dr. Manzoor Ahmad, Senior Fellow at the Pakistan Institute of Development Economics (PIDE), Islamabad; and Dr. Usman W. Chohan, Advisor at CASS. The session was moderated by Zahra Niazi, Research Associate at CASS, while Air Marshal Javaid Ahmed (Retd), President CASS, delivered the opening and closing remarks.
Welcoming the recent ceasefire between Iran and Israel, the experts agreed it averted a possible global crisis, particularly a potential closure of the Strait of Hormuz, which would have disrupted global oil supply chains. Dr. Einar Tangen cautioned that the crisis brought the world dangerously close to catastrophe, driven by unilateral actions of major powers like the United States and Israel. He criticized what he called the “reckless blindness” of these actors, arguing that their disregard for international norms threatens global security and compels weaker nations to consider extreme options like nuclear deterrence. He advocated for a new multilateral approach led by middle powers like Pakistan, grounded in mutual respect, collaboration, and China’s model of sovereignty-focused diplomacy.
Dr. Manzoor Ahmad discussed the potential ripple effects of such a conflict on Pakistan’s already fragile economy. He emphasized the need for forward-thinking policy measures to mitigate inflation, trade imbalances, and unemployment that often result from global crises. “We can’t afford knee-jerk reactions. We need resilience and proactive planning,” he said.
Dr. Usman W. Chohan presented a detailed analysis of the conflict’s economic costs, highlighting Israel’s daily military expenditure of up to USD 1 billion, rising fiscal deficits, and declining civilian and tech sector productivity. For Iran, he noted deepening inflation and mounting pressure on energy infrastructure. He pointed out that Pakistan is already feeling the economic pinch through increased fuel smuggling and macroeconomic instability. With 70% of Pakistan’s oil imports passing through the Strait of Hormuz, sustained tensions and rising Brent crude prices—ranging between USD 90–100 per barrel—could significantly widen the country’s current account deficit, weaken the rupee, and slash GDP growth by up to 1.5 percentage points.
Participants from the UK and Pakistan engaged in a dynamic Q&A session, further exploring solutions to shield Pakistan’s economy from external shocks.
In his closing remarks, Air Marshal Javaid Ahmed (Retd.) stressed the urgency of safeguarding Pakistan’s energy infrastructure and building diversified, resilient strategic partnerships. He underscored that in today’s complex global environment, economic stability cannot be separated from geopolitical developments.
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