Apr 25, 2025
Can Pakistan Sustain a War with India Amid Its Growing Economic Crisis?
Pakistan's economic crisis worsens due to escalating tensions with India and the suspension of the Indus Waters Treaty, threatening its agriculture and stability
On April 24, 2025, the Pakistan Stock Exchange (PSX) saw a major drop of over 2,000 points, reflecting the growing uncertainty and investor fears regarding the escalating geopolitical situation
The International Monetary Fund (IMF) downgraded Pakistan’s GDP growth forecast for FY25 to 2.6%, signaling a slowdown in the economy amidst rising political tensions
Pakistan's agricultural sector is heavily dependent on the Indus River, and the suspension of the treaty threatens to disrupt water supply, putting critical crops at risk and endangering food security
Pakistan’s external debt continues to rise, with over $22 billion in obligations for fiscal year 2025, which further strains its economy as it seeks additional funding from international lenders
India’s actions, including suspending the Indus Waters Treaty and downgrading diplomatic ties, have worsened relations between the two countries, escalating tensions
The National Security Committee of Pakistan held a meeting to discuss India’s aggressive moves, preparing a strategic response to the ongoing diplomatic crisis
The combination of economic instability and heightened diplomatic tensions increases the risk of military conflict between India and Pakistan, both nuclear-armed nations, with global implications
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