Pakistan Faces Rising Climate Losses as GDP Risks Grow
Pakistan is facing climate-related losses at a scale above both global and regional averages, according to findings cited by the State Bank of Pakistan in its half-yearly economic review. The report, highlighted from Karachi, places the country among the world’s most exposed economies despite its limited share in global greenhouse gas emissions.
The central bank’s assessment says climatic disasters in Pakistan during 2000-2024 were more frequent and damaging than broader international and regional trends. It warns that the country is trapped in a difficult development challenge: Pakistan must expand economic growth while also lowering the carbon intensity of that growth.
The report refers to World Bank estimates showing that Pakistan’s gross domestic product could decline by 4.5 to 6.5 percent by 2050 under a more optimistic climate scenario. Under a more severe scenario, the loss could rise to 7 to 9 percent, with agriculture and industry identified as the most vulnerable sectors of the economy.
The State Bank described the task as exceptionally difficult because Pakistan needs stronger growth, investment and productivity at the same time that climate pressures are becoming more frequent. The report also warned that without timely climate action, output in agriculture and industry could fall sharply by mid-century, deepening risks to jobs, food security and exports.
Pakistan’s vulnerability is especially stark because its contribution to global emissions remains low. The report notes that Pakistan accounts for about 1 percent of global greenhouse gas emissions and ranks low in per-capita emissions, yet it remains among the most affected countries from climate events recorded between 1995 and 2024.
The background to the warning is Pakistan’s worsening exposure to floods, extreme heat, erratic rainfall, sea-level rise and glacial retreat. The 2022 floods alone caused losses running into tens of billions of dollars, while earlier climate-linked disasters between 1992 and 2021 also imposed heavy economic damage on communities, infrastructure and public finances.
At the same time, the report points out that Pakistan’s emissions per unit of economic output remain comparatively high. Energy and agriculture have driven much of the increase in emissions over decades, meaning that a traditional growth path could raise environmental costs even as the country tries to lift incomes and industrial activity.
The economic impact could be far-reaching for Pakistan. Climate shocks can disrupt crops, raise food prices, damage roads and energy systems, increase health costs and force the government to divert scarce resources from development to emergency relief. For businesses, the rising frequency of climate events also threatens supply chains, insurance costs and investor confidence.
The next phase for policymakers will be to connect climate planning with budget decisions, industrial policy and energy reform. Pakistan has pledged major emissions reductions by 2035 and has pursued initiatives such as tree plantation, mangrove restoration and rooftop solar growth, but the State Bank’s warning suggests that faster and better-funded adaptation will be essential to protect long-term economic stability.