Overview

• Catastrophic flooding slashed agricultural output by about 10% in Punjab and Sindh, hitting rice, wheat, cotton, sugarcane and maize.
• The World Bank flags renewed price pressures from disrupted food supply chains, even after inflation fell to single digits in FY2024/25.
• Pakistan’s exports are projected to contract by up to 1.5% following new U.S. tariffs, underscoring weak competitiveness and energy bottlenecks.
• Poverty has worsened sharply, with 46% of the population below $3 a day in 2023, as limited fiscal space restricts social protection.
• A rebound to about 3.4% in 2026–27 is contingent on farm recovery, supported by tariff cuts under the 2025–2030 plan and reforms that lift female workforce participation.