KARACHI: Pakistan’s economy has suffered losses of nearly $59 billion from climate-related disasters over the past three decades, a State Bank of Pakistan’s (SBP) report said on Tuesday, underscoring the growing economic threat posed by extreme weather events.
Pakistan is among the countries most vulnerable to climate change despite contributing less than 1 percent to global greenhouse gas emissions. In recent years, the country has faced increasingly frequent floods, heatwaves and droughts that have disrupted livelihoods and weakened economic growth.
The report warned that climate change was creating “multi-sectoral and multifaceted threats” to the South Asian nation’s economy, with agriculture, energy, infrastructure and tourism among the hardest-hit sectors.
“Climate disasters have already inflicted economic losses amounting to $29.3 billion on Pakistan’s economy during 1992-2021, whereas the 2022 floods alone caused damages of around $28 billion,” the central bank said, citing official and international estimates.
Agriculture and industry remained the most exposed sectors, with the output potentially declining by up to 17 percent by mid-century without timely climate action.
The report described agriculture as “among the country’s most climate vulnerable and hardest-hit sectors,” noting that even moderate climate shocks could translate into severe economic losses and threaten food security. According to official estimates cited by the SBP, the agriculture sector sustained damages worth $1.5 billion in the 2025 floods.
It said the devastating 2022 floods, which submerged large parts of the country, had both direct and indirect impacts on gross domestic product (GDP). While reconstruction efforts and recovery in agricultural production partially offset the immediate losses, the floods also triggered higher input prices that negatively affected overall economic activity.
The central bank warned that climate risks could significantly reduce Pakistan’s long-term growth prospects if urgent mitigation and adaptation measures were not adopted.
“In the long term, World Bank estimates [from 2022] show Pakistan’s GDP is projected to fall by 4.5-6.5 percent by 2050 due to climate change in the optimistic scenario, and by as much as 7-9 percent in the pessimistic scenario,” the report said.
The central bank also cautioned that climate-related disruptions posed wider risks to inflation, the external account and Pakistan’s fiscal position, potentially complicating efforts to achieve sustainable economic growth and meet development goals.
