A year after Russia’s invasion of Ukraine, Pakistan’s economy continues to bleed 

Ukrainian bystanders look on to residential buildings that were destroyed during an attack, in Borodyanka on February 23, 2023. (Photo courtesy: AFP/FILE)
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Updated 25 February 2023
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A year after Russia’s invasion of Ukraine, Pakistan’s economy continues to bleed 

  • Economists say the conflict cost Pakistan 1 percent of GDP, directly contributing 9 percent to inflation rate 
  • Pakistan will continue to suffer from impacts of Russia-Ukraine conflict until 2027, experts say 

KARACHI: When Pakistan’s former prime minister Imran Khan visited Moscow on February 24 last year, he did not realize that the man he was to meet in Kremlin was about to press the war button and his country would bear its brunt. A year on, the estimates indicate that the war has cost his country 1 percent of its economic growth. 

The Russian invasion, which entered its second year on Friday with no end in sight, coincided with Khan’s visit to Moscow and has hit Pakistan hardest in terms of diplomatic relations with the West and economically at home. 

The conflict disrupted the global supply-chain network and led to an international hike in oil price. It came at a time when the South Asian country was recovering from the impacts of the COVID-19 pandemic and, according to economists, has dented Pakistan’s economy in various ways. 

“The first major impact of the Russia-Ukraine war was that Pakistan’s energy import bill inflated substantially and increased the cost of production which triggered huge inflationary pressure in the country,” Dr. Sajid Amin, a deputy executive director at the Sustainable Development Policy Institute (SDPI), told Arab News. 

“We estimate that the war has directly contributed 8-9 percent to current inflation rate in Pakistan as oil and food commodities prices shoot up in the global market after a war.” 

The South Asian nation is currently experiencing multi-decade high inflation that was recorded at 27.6 percent in January and is projected to hit as high as 40 percent in coming days. 

“The war has had severe impact in terms of commodity price hikes, termed as the commodities super cycle, which coincided with the opening of the industrial world after COVID and the shortage caused by the Russian-Ukraine war,” Dr. Khaqan Najeeb, a former adviser to the Pakistani finance ministry, told Arab News. 

The increase in Pakistan’s overall energy bill pushed the country’s current account deficit (CAD) beyond $17.4 billion, impacting its reserves that were already dwindling since December 2021, according to Najeeb. 

“Coupled with fund delays, Pakistan’s balance of payment remained challenging and continues to do so even today,” he added. 

Pakistan’s petroleum import bill remained $23.3 billion in the last fiscal year (FY22), which was 105 percent higher than the previous year, while the country has imported energy products worth $10.6 billion during the first seven months of this current fiscal year (FY23), according to official data. 

Economists say 1 percent of Pakistan’s gross domestic product (GDP) has directly suffered because of the Russian invasion of Ukraine. 

“The GDP loss that has been globally estimated by many institutions is 1 percent due to the Russia-Ukraine conflict,” Amin said. 

“Our estimates show that it has increased unemployment in Pakistan and pushed roughly 3.5 million people below the poverty line.” 

The conflict, through oil and food price hikes, has severely impacted the life of a commoner in Pakistan. 

“Particularly, the poor segment that spends 60-70 percent of their income on food basket,” Amin said. 

“Those who were close to the poverty line have slipped below the poverty line and at the same time, employment opportunities have diminished amid monetary and fiscal policy tightening.” 

The most important fact, according to Pakistani economists, is that the impacts of the Russian invasion will continue to haunt Pakistan for the next five years. 

“Our estimates suggest that the war impacts will continue to persist until 2026-27, also because of the International Monetary Fund (IMF) program and contractionary monetary policy,” Amin said. 

As cash-strapped Pakistan continues to suffer at the economic front, experts say the country has faced setbacks on the diplomatic front as well. 

“Pakistan has suffered from the almost exclusive focus of the US and Western countries on the war in Ukraine. These countries have little time and energy left to pay attention to other problem spots around the world, including Pakistan,” Husain Haqqani, a former Pakistani ambassador to the US who is currently a scholar at the Anwar Gargash Diplomatic Academy in Abu Dhabi, told Arab News. 

“The fact that former prime minister Imran Khan chose to stand beside President Putin in Moscow on the day Russia invaded Ukraine further diminished Pakistan’s ties with the West.” 

Haqqani said though Pakistan has move on but the war has caused it economic and political damages. 

“Pakistan has moved on from that moment but the Ukraine war has hurt Pakistan economically as well as politically,” he said. 

“Politically, Pakistan’s loss has come from the lack of ability of major Western leaders to attend to Pakistan and its neighborhood because their attention is on the war in Ukraine.” 

As Russia-Ukraine conflict continues to fuel volatility in the global commodity market, Pakistani authorities are striving to import petroleum products and Russian oil at discounted rates. 

“Pakistan has now tried to take advantage of price tact, Russian crude and refined products. Let’s hope that it does materialize,” Najeeb said. 

“The price that has been quoted informally around $60 a barrel may help bring down Pakistan’s imported energy costs and ease the balance-of-payment pressure as we move forward.” 

Pakistani authorities expect to import Russian refined oil from March this year, expecting that Moscow will provide cheap energy alternates to energy-deficient Pakistan. 
 


Pakistan PM Sharif heads to Azerbaijan for ECO summit focused on climate, trade

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Pakistan PM Sharif heads to Azerbaijan for ECO summit focused on climate, trade

  • Regional leaders gather in Baku to discuss sustainable development, connectivity
  • PM Sharif expected to reaffirm Pakistan’s commitment to ECO Vision 2025

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif will be in Azerbaijan from today, Thursday, to attend the two-day 17th Economic Cooperation Organization (ECO) summit in Baku, where regional leaders will meet to discuss sustainable growth, climate resilience and increased intra-regional trade.

The theme of this year’s summit is “New ECO Vision for a Sustainable and Climate Resilient Future.” The ECO is a 10-member regional bloc comprising countries from Central and South Asia, the Caucasus, and the Middle East.

According to a report published in state broadcaster Radio Pakistan, Sharif will lead the Pakistani delegation and “share Pakistan’s perspective on key regional and global challenges.”

The report said he will also “reaffirm Pakistan’s commitment to the ECO Vision 2025 and advocate for enhanced intra-regional trade, transport connectivity, energy cooperation, and sustainable development.”

On the sidelines of the summit, Sharif is scheduled to hold bilateral meetings with other ECO leaders to discuss matters of mutual interest.

This marks Sharif’s second visit to Azerbaijan this year. He last traveled to Baku in May 2025, where he met with Azerbaijani President Ilham Aliyev and discussed deepening bilateral cooperation in energy and trade.

The ECO was established in 1985 by Iran, Turkiye, and Pakistan, and was expanded later to include Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The organization aims to promote economic, technical, and cultural cooperation among member states.


Hindu pilgrimage begins at Kashmir site where April attack triggered brief war with Pakistan

Updated 7 min 50 sec ago
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Hindu pilgrimage begins at Kashmir site where April attack triggered brief war with Pakistan

  • Last year, half a million devotees took part in the Amarnath pilgrimage to a cave above the town of Pahalgam
  • Pahalgam is site where April 22 attack killed 26 tourists, unleashing brief but intense war with neighboring Pakistan

PAHALGAM, India: Hindus began a vast month-long pilgrimage in contested Indian Kashmir on Thursday, with many of the faithful starting from near the site where a deadly April attack triggered conflict with Pakistan.

Last year, half a million devotees took part in the Amarnath pilgrimage to a sacred ice pillar located in a cave in the forested Himalayan hills above the town of Pahalgam.

Pahalgam is the site where gunmen on April 22 killed 26 mostly Hindu tourists.

New Delhi said the gunmen were backed by Pakistan, claims Islamabad rejected — triggering a series of tit-for-tat diplomatic measures that escalated into a four-day conflict.

It was the worst standoff by the nuclear-armed nations since 1999, with more than 70 people killed in missile, drone and artillery fire on both sides, before a May 10 ceasefire.

But pilgrim Muneshwar Das Shashtri, who traveled from Uttar Pradesh state, told AFP “there is no fear of any kind.”

“Our army is standing guard everywhere. No one can raise a finger toward us,” he said.

India has ramped up security for the event, deploying 45,000 troops with high-tech surveillance tools overseeing the grueling trek to reach the high-altitude cave, dedicated to the Hindu deity of destruction Shiva.

“We have multi-layered and in-depth security arrangements so that we can make the pilgrimage safe and smooth for the devotees,” said VK Birdi, police chief for the Muslim-majority territory.

At Pahalgam, soldiers have turned a tented base camp into a fortress encircled by razor wire.

Troops in newly deployed armored cars, or from gun positions behind sandbags, keep a close watch — efforts boosted by facial recognition cameras.

“High-quality surveillance cameras have been installed at all major points along the route,” said Manoj Sinha, the Indian-appointed top administrator for Jammu and Kashmir.

All pilgrims must be registered and travel in guarded vehicle convoys, until they start out to walk.

Camouflaged bunkers have been erected in the forests along the route, where dozens of makeshift kitchens provide free food.

Electronic radio cards pinpoint their location.

Pilgrims can take several days to reach the cave, perched at 3,900 meters (12,800 feet) high, around 30 kilometers (18 miles) uphill from the last easily motorable track.

“Whatever the attack that was carried out here, I am not afraid. I have come to get a glimpse of baba (the ice formation)” said Ujwal Yadav, 29, from India’s Uttar Pradesh state, undertaking his first pilgrimage to the shrine.

“Such are the security arrangements here that no one can be hurt.”

Sinha has said that “public confidence is returning,” but admits that pilgrim registration had dipped by 10 percent this year.

Once a modest, little-known ritual, attended by only a few thousand mainly local devotees, the pilgrimage has grown since an armed insurgency erupted in 1989.

India’s government has since heavily promoted the annual event, which runs until August 9.

Rebels fighting against India’s control of Kashmir have said the pilgrimage is not a target, but have warned they would act if it was used to assert Hindu dominance.

In 2017, suspected rebels attacked a pilgrim bus, killing 11 people.

The gunmen who carried out the April 22 killings remain at large, despite the manhunt by security forces in Kashmir where India has half a million soldiers permanently deployed.

On June 22, India’s National Investigation Agency said two men had been arrested from the Pahalgam area who they said had “provided food, shelter and logistical support” to the gunmen.

Indian police have issued wanted notices for three of the gunmen, two of whom they said were Pakistani citizens. Pakistani has rejected the claim.


Pakistan PM orders doubling of digital payment targets to boost cashless economy

Updated 10 min 29 sec ago
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Pakistan PM orders doubling of digital payment targets to boost cashless economy

  • Move aims to deepen transparency, widen tax net as mobile app users set to rise from 95-120 million
  • Government targets expansion of QR code usage, e-payments and Internet access across the country

ISLAMABAD: Prime Minister Shehbaz Sharif has ordered the doubling of all key digital economy targets, including mobile-based payments, QR code adoption, and overall transaction volumes, as part of Pakistan’s push to accelerate its transition to a cashless economy, his office said on Thursday.

The directive comes as authorities aim to increase mobile payment users from 95 million to 120 million, and QR code-enabled merchants from 0.9 million to 2 million. The total value of digital transactions is expected to rise from Rs7.5 billion ($26.9 million) to Rs12 billion ($43 million), according to figures shared in a meeting chaired by Sharif on Thursday. A statement released after the discussions did not provide a timeline for meeting these targets.

Sharif said the targets were not ambitious enough and must be doubled across the board to match the scale of Pakistan’s digital transformation agenda.

“A digital transaction system is essential for bringing transparency to the economy,” Sharif said. “It is an urgent need of the hour to ease payments between citizens and businesses and raise awareness about the use of digital systems.”

Pakistan, a country of over 240 million people, has a vast informal economy and low tax compliance. The government has long identified digitization as a key tool to improve governance, reduce corruption, and expand the country’s narrow tax base.

Three committees — the Digital Payments Innovation and Adoption Committee, the Digital Public Infrastructure Committee, and the Government Payments Committee — have already been formed to oversee the transition. 

At Thursday’s meeting, Sharif directed the bodies to present “workable proposals in collaboration with all stakeholders,” the statement said.

The State Bank of Pakistan is developing strategies to simplify digital transactions for traders, including special incentive packages for small businesses. The government also plans to expand the use of digital mobile apps and improve access to digital public infrastructure.

Sharif was also briefed on new services set to launch soon, including e-stamping, as well as public Wi-Fi expansion across hospitals, schools, parks, government offices and metro lines in Islamabad.

He instructed officials to roll out these facilities across all federal territories, as well as Azad Jammu and Kashmir and Gilgit-Baltistan.


Pakistan issues fresh monsoon flood alert as deaths rises to 64 in over a week

Updated 03 July 2025
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Pakistan issues fresh monsoon flood alert as deaths rises to 64 in over a week

  • New rainfall system threatens Pothohar, central and southern Punjab, KP provinces 
  • NDMA warns of glacial floods, landslides as rivers expected to swell across country

ISLAMABAD: Pakistan’s disaster and weather authorities issued fresh flood warnings on Thursday as new monsoon rains are expected in parts of the Punjab and Khyber Pakhtunkhwa provinces, with the national death toll from rain-related incidents rising to 64 in just over a week.

A weather system is currently active over Chakwal, Talagang, and Mianwali districts and is expected to bring rain, wind and thunderstorms to areas including Khushab, Sargodha, Bhakkar, Dera Ismail Khan and Lakki Marwat in the next two to four hours, the Pakistan Meteorological Department (PMD) said in an advisory on Thursday morning.

“Public is advised to take precautionary measures during the weather activity accordingly,” the PMD said in a statement issued from its Islamabad office.

Separately, the Punjab Disaster Management Authority (PDMA) also warned of a fresh spell of monsoon rains across the province from July 5 to 10, with heavy downpours expected to trigger flash flooding, especially in low-lying and river-adjacent districts.

“The second monsoon spell will begin from July 5 across Punjab,” the PDMA said in an alert, listing expected rains in Rawalpindi, Murree, Attock, Chakwal, Lahore, Faisalabad, Sargodha, Bahawalpur, and D.G. Khan among other districts. 

“All relevant departments have been issued preemptive alerts on the instructions of Punjab Chief Minister Maryam Nawaz,” it added.

The warning comes as Pakistan’s National Disaster Management Authority (NDMA) confirmed in a statement on Wednesday that at least 64 people, including 45 children and 31 women, had been killed and over 113 injured in rain-related incidents since June 26.

Khyber Pakhtunkhwa province accounted for 22 deaths, followed by Punjab with 21, Sindh with 15, and Balochistan with five, the NDMA said.

The authority has issued impact-based alerts highlighting the risk of urban flooding, flash floods, landslides and glacial lake outburst floods (GLOFs) across northern regions like Gilgit-Baltistan and KP as well as hill torrents in DG Khan and Rajanpur.

“The National Emergencies Operation Center has issued multiple alerts in light of forecasted severe weather conditions expected from 2nd to 8th July 2025,” the NDMA said.

In the country’s mountainous north, especially in Gilgit-Baltistan, high temperatures have accelerated glacier melt, compounding the risk of sudden floods and landslides in narrow valleys and near vulnerable glacial lakes, the authority added.

“Tourists are advised against visiting high-altitude and glacial regions during this period,” the NDMA warned, instructing municipal and district administrations to clear stormwater drains, activate emergency response teams and prepare for possible evacuations.

Pakistan, home to over 240 million people, is consistently ranked among the countries most vulnerable to climate change. In 2022, record-breaking monsoon rains and glacier melt caused catastrophic floods that affected 33 million people and killed more than 1,700.

In its alert on Thursday, the PDMA specifically warned of urban flooding in northern and central Punjab, while the PMD warned of localized thunderstorms and strong winds hitting key agricultural and urban districts over the next 48 hours.

The authorities have urged the public to stay indoors during thunderstorms, avoid unnecessary travel and keep children away from electricity poles and waterlogged areas.

For emergencies, the PDMA advised citizens to contact its helpline 1129.


Pakistani’s Bioniks fits first prosthetic limb on Gaza child survivor Sidra

Updated 03 July 2025
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Pakistani’s Bioniks fits first prosthetic limb on Gaza child survivor Sidra

  • Pakistani startup provides arm to young girl through Jordan partnership as part of Gaza amputee support mission
  • Founded in Karachi, Bioniks specializes in low-cost, customizable prosthetics using 3D printing and smart sensors

KARACHI: Pakistani health-tech Bioniks has successfully fitted its first prosthetic limb in Gaza for a young girl injured in the ongoing Israel-Hamas war, the firm said on social media on Thursday, marking the start of its broader effort to support amputees in the besieged territory.

The company said the fitting was made possible through its partnership with Mafaz, Bioniks’ official collaborator in Jordan. The recipient, Sidra, lost her arm during the war and now becomes the first beneficiary of Bioniks’ long-term humanitarian initiative aimed at war victims in Gaza.

“This marks the beginning of Bioniks’ mission to support amputees in Gaza,” the company said in a statement posted to X on Thursday, adding that Sidra’s journey “reflects the resilience of so many in Gaza.”

Bioniks said it hopes to give survivors “mobility, confidence, hope, dignity, and independence ... in a place where conflict has taken so much.”

Bioniks did not specify how many Gaza patients it plans to support or the timeline for future fittings but said its mission will be sustained and scaled in coordination with regional partners.

Founded in Karachi, Bioniks specializes in low-cost, customizable prosthetics using 3D printing and smart sensors. It has gained international recognition for its work with children and war survivors across Pakistan, and has begun expanding its outreach to conflict zones in the region.

The latest war in Gaza began on October 7, 2023, when Hamas carried out a cross-border attack on Israeli communities, killing around 1,200 people and seizing 251 hostages according to Israeli tallies. Israel has since been carrying out a devastating air and ground assault on Gaza, whose health ministry says the offensive has killed over 56,000 Palestinians, most of them women and children, and tens of thousands more have been injured. The fighting has displaced nearly 80 percent of the population and decimated the strip’s already fragile health infrastructure.

Aid organizations have widely reported a growing number of amputations, especially among children, due to Israeli airstrikes and the collapse of trauma care. UNICEF estimates that between 3,000 and 4,000 children in Gaza have had one or more limbs amputated. The besieged enclave is now home to more child amputees per inhabitant than anywhere else in the world.

Bioniks said its goal is to reach more children and adults in Gaza with personalized prosthetic limbs and follow-up care.

“Bioniks believes that no one should be left behind when it comes to mobility and dignity,” the company said in the press release. “Through this initiative, our goal is to reach more children and adults affected by war with customized prosthetic limbs and long-term care.”

The company has previously worked with Pakistani hospitals and rehabilitation centers to provide smart prosthetics to underprivileged children and adults, often using crowd-funding and donor support to cover costs.