Torrential floods and monsoon rains have taken a toll on the economy. It seems to be a repeat of the 2022 deluge devastation, wherein the economy shrunk to the tune of $10 billion. The World Bank has painted a dismal picture of Pakistan’s economy saying that growth for FY26 will dip by 0.5%, spiraling inflation to 7.2% and causing a decline in exports by 1.5%.
Being agrarian, Pakistan’s economy is in dire straits as 2.2 million hectares of agricultural land has come under flood waters, with standing crops being crippled. Per NDMA estimates, the loss could run into billions of rupees as more than 437 kilometers of roads and 52 bridges were swept away, 12,500 houses were damaged and 6,500 livestock perished.
The UN, moreover, noted that more than six million people have been affected by this heavier-than-usual monsoon rains, as well as cloudbursts and landslides across the mountainous range in K-P and Northern Areas. The economy had already been in the woods for long as measures to resurrect it were facing institutional and adaptability problems. The floods have only aggravated the situation, and pushed the country to the verge of a food crisis. Import of grains is toiling in the forex context, and the real GDP for FY26 is projected to remain around 2.6%, contrary to government’s euphoric projections of 4.2%. This is a fallback from IMF commitments too, as it was eager to see the economy to grow at 3.5%.
Pakistan is likely to see a drop in agricultural output by at least 10% in Punjab, affecting major crops such as rice, sugarcane, cotton, wheat and maize. The Washington-based global lender has also voiced concern over what is the highest rate of fertility in the region, i.e. 3.5%, flagging the resource distribution enigma as the economy passes through the stagnation phase. The way out is to buckle up, multi-tasking with the agrarian lands and producing enough to stay afloat. Located in a climate-impacted zone, Pakistan needs a strategy to strike a balance between water management, agrarian production and appropriate crop identification.
