Pakistan’s economic growth for fiscal year 2025-26 could drop to between zero and one percent, far below the International Monetary Fund’s (IMF) projection of 3.6 percent, as devastating floods put agriculture and inflation under severe pressure.
This warning came from former finance minister Dr. Hafeez Pasha during Aaj TV’s talk show.
The government has set an GDP growth target of 4.2% for 2025-26. However, Dr. Pasha said achieving even the IMF’s revised estimate of 3.6% is unrealistic in the face of widespread crop destruction. “In 2022-23, growth collapsed due to floods. The same pattern is emerging now, with agriculture likely to bear the heaviest losses,” he noted.
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He recalled that the 2022 floods caused damages worth nearly $30 billion, equivalent to 7–8% of GDP. “This year, too, Pakistan risks sliding to zero growth unless other sectors perform exceptionally well,” he cautioned.
Dr. Pasha also warned of spiraling inflation, food shortages, and sharp hikes in the prices of essential items. He criticized the absence of a long-term strategy, pointing out that Pakistan faces major floods every three to four years yet continues to lack effective precautionary investment plans.
On the fiscal side, he said the current budgetary framework has been fundamentally disrupted, as both federal and provincial governments will be forced to channel massive resources toward rehabilitation and recovery. “The government must immediately reset its priorities, placing flood-affected families and agriculture at the heart of its policy response,” he stressed.
