Affecting over 100 million Pakistanis and 16 million households, the 2025 floods have put a strain on the already weakened economy and disturbed the country in all other aspects. Thousands of homes were swept away, entire crop fields were destroyed, entire livelihoods were harmed, and millions were displaced along. Several sectors of the economy, most importantly the agricultural sector-which makes up 20% of the country’s GDP- suffered greatly. With widespread loan defaults, broken trade routes, and declining productivity, the financial markets came under extreme pressure.
Alongside climate change, the recent floods were also a result of tied up socioeconomic issues. Due to lack of funds and allocations the flood resistant infrastructure of Pakistan is not suited for the upcoming climactic challenges. This was seen in the floodings of 2025 where homes, farms and business sites faced immense vulnerability leading to mass destruction. Poor urban planning was also another reason with little flood drainage systems across the majority of the country. According to the 2025 flood analysis report by Gallup Pakistani of the 100 million affected, 52% came from the low income class, only 9% came from the upper class and 31% of the middle class were affected. Consequently, the poorest segments of society endured the greatest burden.
The poor suffered most because of lack of government attention, welfare and regulations including failure of warning systems, lack of drainage systems, rapid unregularised urbanisation and other services the government should have provided better. Low income families most often reside in informal settlements with poorly constructed houses located in high-risk areas; such as riverbanks, low-lying regions, or unplanned urban look at this ) neighbourhoods often referred to as “slums” because safer, elevated, and well-developed land is largely controlled by private real estate developers or reserved for government infrastructure projects, making it unaffordable for low-income families. These homes lack strong foundations, proper drainage, and flood-proof structures, so they are easily destroyed when water levels rise.
Affecting over 100 million Pakistanis and 16 million households, the 2025 floods have put a strain on the already weakened economy and disturbed the country in all other aspects
Low income households also have restricted emergency resources and have to rely on the overburdened government. It is to highlight that low income families rely on daily wage working for informal sectors of the economy which when affected cannot pay their labourers, therefore with non existent insurances and low savings, the poor are most affected by the floods getting hit from all angles of livelihood.
According to the Pakistan Institute of Development Economics the agricultural sector employs the majority of the labour force and contributes the most out of sectors. It is obvious that the agriculture sector has suffered the most out of all sectors of the economy. This has not only led to food shortages and loss in profits from the agricultural sector and decreased revenue but also has cost the livelihoods of many. Pakistan’s continued reliance on agriculture-while neighbouring countries like India have diversified into alternative industries-has further exposed the economy to such climate-induced disasters as seen in the recent 2025 floods.
Now looking out of the nation's internal problems, there are external issues out of Pakistan’s hand. Historically, high-income countries and large industrial corporations have driven the global emissions responsible for extreme weather events. Less than one hundred fossil fuel and cement companies were responsible for nearly two-thirds of global emissions from 1850 to 2010, and twenty major firms alone accounted for over a third of global greenhouse gas emissions in the last fifty years. Such emissions have contributed to intensified monsoon variability, accelerated glacial melt, and higher rainfall intensity in South Asia. In contrast, Pakistan has emitted only a small fraction of these gases, with a “climate credit” of 4.3% (Spence & Jan, 2022). Despite this, the country faces the immense burden of climate shocks such as the recent floods more than any other responsible western nation.
In 2022, Pakistan experienced $10 billion in flood-related damages while carrying an external debt of $28 billion, compounded by inflation of 27% Such conditions show the nation’s dual vulnerability; exposure to climate hazards caused externally, and fiscal constraints that further limit the country’s capacity to respond and act. Unlike high-income nations, Pakistan lacks sufficient domestic resources to finance large-scale adaptation or recovery without obtaining further debt. The concentration of global emissions among wealthy nations and their large corporations, therefore translates directly into economic vulnerability for low-emission countries, further amplifying inequality in both climate shock exposure and monetary capacity.
The structure of international climate finance from NGOs, Organisations and well of nations from the global north further reinforces this obscene economic fragility. Climate funds intended to assist vulnerable nations are often delayed, insufficient, or offered as loans rather than grants, creating what has been described as a “climate debt trap” . Countries like Pakistan are forced to borrow in order to invest in flood defences or relief programs, increasing debt servicing obligations at the expense of domestic welfare spending in a nation where over 22.8 million children don’t go to school(UNICEF). Such global mechanisms highlight the inequities in global climate governance; those who caused the hazards are largely shielded from financial risk, while the despaired victims must bear both the physical and economic costs, the damage and the loss.
Global economic inequality also shapes emissions responsibility. According to the Climate Inequality Report 2025 (4), the top 1% of the global population contributes 41% of emission. Pakistan and such other vulnerable countries face higher economic costs per unit of climate exposure due to limited fiscal capacity, weaker social safety nets, and dependence on agriculture for livelihoods (Climate Impacts Group, 2023). In Pakistan, approximately 35 million people were affected by recent floods, with significant losses in agriculture, housing, and infrastructure, demonstrating how international emissions and global economic inequities cross each other to produce disproportionate human and financial cost.
The government of Pakistan must act upon itself to form a more efficient disaster management and urban planning system where the disparity between the rich and poor are not kept in effect. The needs of all social classes must be acknowledged and should carry weight in government decisions. The state must also actively seek diversify the economy of Pakistan into other sectors to restrain the reliance on agriculture to develop the economy to avoid volatile economic charts and climate disaster vulnerability- a phenomenon expected to be more frequent in the coming years.
The primary burden of transition to a green economy relies on the West as it has historically benefited from a large carbon footprint. Pakistan must join other countries of the global south in demanding support from the global north for a just transition to renewable energy. The government must also demand reparations from the global north in the form of debt write-off, increased aid and long term development loans. Eventually, the challenge of climate change requires a holistic approach that takes into account social, structure and global processes to protect vulnerable populations in Pakistan and across the world.