Pakistan Economic Woes Worsen; Inflation Hits 6.2%In October

Pakistan Economic Woes Worsen; Inflation Hits 6.2% In October, Highest In 2025

The Pakistan government projected inflation to remain between 5 per cent and 6 per cent in October, but later admitted that flood damage and blocked trade routes with Afghanistan have increased the prices of essential goods.

New Delhi: Pakistan's inflation surged to 6.2 per cent in October -- the highest in a year -- amid floods and Afghan border closures affecting food supplies, a recent media report said.

The surge was caused by floods in Punjab and ongoing closures of key trade crossings with Afghanistan, especially at border points such as Torkham and Spin Boldak, which disrupted food supplies and increased prices, the report from Khaama Press News Agency said.

According to the Pakistan Bureau of Statistics, food prices in Pakistan rose by 1.8 per cent from September, the report added.

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The Afghan-based media house cited officials saying inflation had eased below 6 per cent by mid-2025 after hitting nearly 30 per cent last year but surged again due to “temporary supply shocks and base effects.”

"In August, severe floods ravaged farmland and industrial zones across Punjab, killing over 1,000 people and displacing 2.5 million. The disaster also destroyed major crops, worsening supply constraints," the report mentioned.

The government projected inflation to remain between 5 per cent and 6 per cent in October, but later admitted that flood damage and blocked trade routes with Afghanistan have increased the prices of essential goods.

Economists, however, said Pakistan's inflationary pressures stem not only from climate shocks but also from “persistent governance weaknesses and external dependence,” according to the report.

A report in October said that Pakistan's total public debt hit $286 billion by the end of the 2024–25 fiscal year, and its borrowing has reached an "unsustainable" level, up 13 per cent YoY.

The borrowings suggest that deep structural flaws that have become the hallmark of Pakistan's fiscal management, it said, adding that servicing debt, rather than financing growth, remains the single largest use of public resources.

Pakistan's Ministry of Finance's Annual Debt Review 2025 concedes that the debt-to-GDP ratio has climbed to 70 per cent, up from 68 per cent the previous year.

Source: ZeeNews
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