Pakistan faces threat of attack from India in 24-36 hours, UN Secretary General spoke to both
#News Bureau April 30,2025
Pak economy, already in crisis, will it be able to withstand the burden of shock from India?
Will Pakistan’s economy, which was on the verge of default till recently, be able to withstand any kind of blow from India? After the billions of dollars loan from the International Monetary Fund (IMF) and recent economic reforms, Pakistan’s economy was recovering from the brink of default in 2022, but it is now facing a new crisis. Tensions with India have reached a peak. India has postponed the Indus Water Treaty, which is likely to affect agriculture on a large scale and Pakistan has also caused a big loss to itself by closing the airspace for India. Amid the current tension, Pakistan’s stock market has crashed on Wednesday. So is this a warning of a big crisis for Pakistan’s economy?
In fact, India’s recent diplomatic and economic steps have made Pakistan’s situation more delicate. After the terrorist attack in Pahalgam, Kashmir, India has taken tough steps like stopping bilateral trade, expelling Pakistani officials, canceling the SAARC visa exemption scheme and suspending the Indus Water Treaty. These decisions are likely to have a profound impact on Pakistan’s already weak economy.
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Pakistan’s GDP is estimated to be $348.72 billion in 2025. This is not even a tenth of India’s $4.2 trillion economy. The Pakistani rupee has weakened. 1 US dollar has now reached 280.95 Pakistani rupees.
The total debt on Pakistan is estimated to be around 75 trillion Pakistani rupees or 223-264 billion US dollars by 2024. China is the largest lender and has 29 billion US dollars and this is 22% of the total external debt. If we look at the debt-GDP ratio, it has become 65% in 2024. This ratio is likely to increase further.
Pakistan’s total foreign exchange reserves are also very low. The State Bank of Pakistan data shows that as of April 18, 2025, Pakistan’s total foreign exchange reserves are only 15.4 billion US dollars.
The World Bank has lowered Pakistan’s economic growth forecast to 2.7% and warned that the Shahbaz Sharif government may fail to meet its budget deficit targets.
Risk of famine
A recent World Bank report said that more than 10 million people in Pakistan could face extreme food insecurity and hunger in 2025. Production of major crops such as rice and maize is likely to be affected due to poor climate conditions. People living in rural areas will be the most affected.
Despite such conditions, Pakistan’s economy was showing some positive signs recently. In March 2025, the IMF approved a $2 billion loan and according to the Pakistan Bureau of Statistics, inflation fell from a record high of 38% to a three-decade low of 0.7% in May 2023. However, this progress is at risk after India’s actions. Pakistan’s Central Bank has warned that average inflation could be between 5.5% and 7.5% for the fiscal year ending June 2025.
Inflation increased
Prices of essential food items like rice, flour, vegetables, fruits and chicken have seen a sharp rise. Media reports
Pakistan will face difficulties due to the suspension of Indus Water Treaty
India’s decision to suspend the Indus Water Treaty can be the biggest setback for Pakistan. Agriculture contributes 24% to Pakistan’s economy and provides 37.4% employment. Any interruption in the supply of water from the Indus, Jhelum and Chenab rivers can badly affect agricultural production. Experts say that India has not yet restricted the flow of water, but it reserves the right to do so.
A few days ago, the sudden release of water in the Jhelum river caused floods in the lower parts of Pakistan. Crops were destroyed and there was a lot of devastation. It is believed that due to the absence of the treaty, such challenges will continue to remain in front of Pakistan and agriculture will be affected on a large scale.
Closing the airspace will cause great loss to Pakistan!
Pakistan has closed its airspace for Indian aircraft. This seems to be a retaliatory step, but it can cause more damage to Pakistan itself. Pakistan had done the same after the Pulwama attack in 2019 and incurred a loss of about $100 million. Around 400 flights were affected every day during that period.
It was estimated that Pakistan was losing about $232,000 per day from overflight fees. With additional losses from landing and parking fees, the total daily loss reached about $300,000. In addition, Pakistan International Airlines was losing about $460,000 per day due to the suspension of international flights and longer domestic routes. Overall, the combined daily loss for CAA and PIA was about $760,000. By the end of the airspace closure, Pakistan had lost about $100 million.
This time too, the reduction in revenue from overflight fees and other charges could be a big blow to Pakistan’s aviation industry.
Pakistan’s economy is already facing many challenges and India’s recent actions have further aggravated these problems. Supporting terrorism has not only damaged Pakistan’s global image but also endangered its economic stability. India’s decisions related to trade, water and air space can cause long-term economic crisis for Pakistan. If the situation worsens further, Pakistan may face major challenges in finding new trading partners and strengthening its economic policies.
