Floods in 2025 Cost Pakistan’s Economy $2.9 Billion

Federal Minister for Planning and Development Ahsan Iqbal announced on Friday that recent floods have caused an estimated $2.9 billion (Rs. 822 billion) in damages across Pakistan, with the agricultural and infrastructure sectors bearing the brunt of the losses. Speaking at a press conference to release the government’s Monthly Development Update and Flood Damage Assessment Report, Iqbal said the initial assessment has been submitted to the Prime Minister. The floods have damaged 229,000 homes, including 213,000 in Punjab and 6,370 in Balochistan. Iqbal highlighted that inflation has eased significantly, dropping from 9.2% to 4.2% in the first quarter of the fiscal year, while prices of essential goods are stabilizing. Tax revenues have also seen a notable increase, rising 12.5% year-on-year to Rs. 2,884 billion in the first three months. The minister emphasized the government’s commitment to using domestic resources for flood recovery, rather than relying on external aid. He pointed out that after the 2022 floods, Pakistan received only $600 million in foreign assistance against $30 billion in damages, with the remainder provided as loans, including old debt. Iqbal outlined a series of structural reforms aimed at accelerating economic growth and modernizing governance. The government plans to declare 2026 as the “Year of Reforms and Modernization of the Economy,” with a focus on overhauling governance structures, eliminating red tape, and removing anti-business barriers. Reforms are also planned in education, health, and skills development, along with the establishment of a National University of Public Administration. He reaffirmed that Pakistan’s renewed engagement with the US will not affect its strong ties with China, Russia, the EU, the UK, Saudi Arabia, and Iran. Under the “Uraan Pakistan” program, the government aims to grow the economy to $1 trillion by 2035. Final flood damage estimates are expected within two to three weeks, with the assessment being conducted in collaboration with international development partners. The Punjab government has also prepared a major relief package for those affected by the floods.