What Is Driving Pakistan's Inflation to 6.2% Amid Afghan Border Closures?
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Synopsis
Pakistan's inflation has surged to a staggering 6.2% in October, the highest in a year, largely due to devastating floods and Afghan border closures disrupting food supplies. This article explores the causes and implications of this economic crisis, shedding light on the factors affecting the nation’s economy and public debt.
Key Takeaways
- Inflation in Pakistan hit 6.2% in October.
- Floods and Afghan border closures are major contributing factors.
- Food prices rose by 1.8% from September.
- Pakistan's public debt reached $286 billion.
- The debt-to-GDP ratio is now 70%.
New Delhi, Nov 5 (NationPress) The inflation rate in Pakistan skyrocketed to 6.2 percent in October, marking the highest level in a year, as reported by media sources. This increase is attributed to devastating floods and the closure of the Afghan border, which have significantly impacted food availability.
The inflation spike is linked to flooding in Punjab and the ongoing blockade of crucial trade routes with Afghanistan, particularly at key border checkpoints such as Torkham and Spin Boldak. These disruptions have led to higher food prices, according to a report from Khaama Press News Agency.
The Pakistan Bureau of Statistics noted that food prices rose by 1.8 percent from September. Officials cited in the Afghan media reported that inflation had dipped below 6 percent by mid-2025, following a peak of nearly 30 percent last year, but has risen again due to “temporary supply shocks and base effects.”
The report highlighted the chaos wrought by floods in August, which devastated farmland and industrial areas in Punjab, leading to over 1,000 deaths and displacing 2.5 million. This calamity severely affected crop yields, exacerbating supply shortages.
While the government had estimated inflation to be between 5 percent and 6 percent in October, they later acknowledged that the destruction caused by floods and the obstruction of trade routes with Afghanistan have led to increased prices for essential commodities.
Economists contend that the inflationary issues in Pakistan arise not only from climatic events but also from “enduring governance flaws and reliance on external sources,” the report stated.
An earlier report from October revealed that Pakistan's total public debt reached $286 billion by the conclusion of the 2024–25 fiscal year, indicating a 13 percent year-on-year increase, placing the nation’s borrowing at an “unsustainable” level.
This borrowing reflects the deep-rooted structural issues in Pakistan’s fiscal management, emphasizing that servicing debt has become the primary use of public funds rather than promoting growth.
According to the Ministry of Finance, the Annual Debt Review 2025 acknowledges that the debt-to-GDP ratio has surged to 70 percent, up from 68 percent the previous year.
Point of View
It is crucial to recognize that Pakistan's inflation crisis stems from a combination of natural disasters and systemic governance issues. The reliance on external economies and the impact of climate change must be addressed to foster a resilient economy that prioritizes the well-being of its citizens.
NationPress
03/01/2026
Frequently Asked Questions
What is the current inflation rate in Pakistan?
The current inflation rate in Pakistan has reached 6.2% in October, the highest in a year.
What factors have contributed to the inflation rise?
The rise in inflation is primarily due to severe floods in Punjab and the closure of key trade routes with Afghanistan.
How have floods affected Pakistan's economy?
Floods have devastated farmland, leading to crop destruction and increased food prices, further exacerbating inflation.
What is the debt situation in Pakistan?
Pakistan's total public debt has reached $286 billion, reflecting unsustainable borrowing levels and a rising debt-to-GDP ratio.
How does governance impact inflation in Pakistan?
Persistent governance weaknesses and external dependencies are key factors exacerbating inflation and economic instability.
