By Farooq Awan
ISLAMABAD, Oct 18 (Wealth Pakistan): Pakistan’s economy has suffered losses exceeding Rs822 billion ($2.9 billion) due to the devastating floods that swept across the country between June and September 2025, reducing the national growth outlook for fiscal year 2026 to between 3.5 and 3.9 percent, against the targeted 4.2 percent.
The Preliminary Assessment of Flood Damages Report released by the Ministry of Planning, Development and Special Initiatives described the 2025 floods as “unprecedented and apocalyptic,” marking one of the worst natural calamities in Pakistan’s recent history.
It confirmed that more than 1,039 lives were lost, over four million people displaced, and around 229,763 houses damaged or destroyed.
For reference, see the Ministry of Planning’s official page at https://www.pc.gov.pk/.
Pakistan flood losses estimated at Rs822 billion
The floods inflicted severe losses on agriculture, infrastructure, housing, energy, and social sectors, prompting the government to revise growth forecasts and shift budgetary priorities towards relief and rehabilitation.
The report estimates that damage to agriculture amounts to Rs430 billion, while infrastructure losses total Rs307 billion. Housing damage has been valued at Rs92 billion, and the power sector has sustained losses of around Rs25 billion.
The floods have also disrupted transportation and supply chains nationwide, contributing to output losses equivalent to 0.3–0.7 percent of GDP.
According to the Asian Development Bank’s climate resilience overview, Pakistan remains among the world’s most climate-vulnerable nations despite contributing less than one percent to global emissions.
Pakistan ranks among top climate risk nations
The report said Pakistan topped the Global Climate Risk Index 2025 as the country most affected by extreme weather events in 2022, reaffirming its position as a frontline state facing climate injustice.
The Planning Ministry’s analysis indicates that Punjab, Sindh, and Khyber Pakhtunkhwa were hit hardest, with rainfall reaching up to 50 percent above monsoon averages in some districts.
Large areas of farmland, roads, and settlements were submerged, while key industries linked to agriculture and energy also suffered production disruptions.
Growth slowdown and unemployment impact
The report projects that the agriculture sector will grow by only 3.0–3.8 percent in FY2026, compared to the earlier target of 4.5 percent.
The industrial sector is expected to expand by 4.1–4.2 percent instead of 4.3 percent, and services are likely to decelerate to 3.5–3.7 percent growth. Unemployment is expected to rise by nearly 0.22 million workers in the current fiscal year.
For background on Pakistan’s economic planning, see World Bank climate resilience resources.
Government pledges climate-resilient recovery
Prime Minister Shehbaz Sharif, in his message included in the report, called the catastrophe a “national tragedy that shattered lives and livelihoods.”
He pledged that the government would adopt a “build back better” approach, focusing on climate-resilient infrastructure and inclusive recovery. “We will transform this moment of crisis into an opportunity to rebuild smarter and stronger,” he said.
Despite the scale of destruction, Pakistan has not yet issued an international appeal for aid, relying first on domestic resources. However, the report noted that several global organizations have already begun extending targeted support.
Recovery strategy and long-term adaptation
The Ministry of Planning emphasized that the post-flood reconstruction strategy would prioritize infrastructure rehabilitation, housing reconstruction, and agricultural revival while aligning fiscal policies to balance humanitarian needs with macroeconomic stability.
“The recovery will demand sustained investment and long-term climate adaptation,” the document concluded, urging coordinated action among federal and provincial agencies, armed forces, and civil society.