Karachi:
Pakistan is preparing for a significant increase in food inflation in the coming months, as devastating floods have wreaked havoc in the country’s agricultural sector, in particular Punjab and Khyber-Pakhtunkhwa (KP).
Initial estimates and a dark comparison with the 2022 flood crisis paint a worrying table for consumers already struggling with economic challenges.
The increase in water levels, which have submerged large expanses of fertile and displaced land of thousands, should cause serious shortages and price increases for essential foods.
“Food prices are likely to withdraw in the coming months due to losses and disruptions due to floods,” noted Mustafa Mustansir, research manager at Taurus Securities, in a report.
This assessment is based on initial estimates and establishes parallels with the price trends observed after the 2022 floods, which suggests that food inflation could accelerate from September.
He stressed that the prices of certain fruits and vegetables have already had a sharp increase, indicating the immediate impact of the crisis.
The National Disaster Management Authority (NDMA) reported 819 narcotic deaths and more than 8,658 damaged or destroyed houses. The cattle sector has also undergone huge losses, with 6,138 cattle heads perished.
The KP was the hardest shot, enduring extended infrastructure damage, including roads, bridges, powers and irrigation canals.
Meanwhile, Punjab continues to deal with a general devastation while flood waters, mainly released from the Indian side, tirelessly cross its flooding plains, forcing thousands to evacuate.
The active conditions of the monsoon should persist until at least September 10, 2025, with strong strong precipitation planned in eastern Punjab, the KP, the cashmere of the Azad, the Gilgit-Baltistan and the Sindh, exacerbating the risks of flooding in downstream districts.
The imminent food crisis is not only a projection but a harsh reality for millions.
The report warned that articles like wheat, rice, potatoes, onions, tomatoes, milk and eggs are the most vulnerable. The pressure can also be observed in the case of pulses and other foods, subject to the extent of harvest losses.
These staples form the foundation of Pakistani households, and their increased prices will disproportionately affect low -income families, pushing much further into poverty.
Recalling the impact of the floods of 2022, the report noted that “the growth of the month over the month (MOM) of non -perishable food prices was on average 2.5% between July 2022 and December 2022. The growth of mothers in perishable food prices was on average 4.8% over the same period.
While food inflation had been down from August 2024 to June 2025, with an average of approximately 0.4% MOM, it recorded a sharp increase of approximately 3% in July 2025. This sudden jump signals the start of what could be a sustained period of the increase in food costs.
The agricultural sector, the backbone of the Pakistani economy, brought the weight of floods.
The report pointed out that the growth objective of the agricultural sector for financial year 26 is “the most likely to be missed, which also affects the overall growth of GDP”.
Cotton production, in particular, is seriously affected, domestic cotton arrivals already strongly lowered by 6% in annual shift for Punjab and 24% in annual sliding for the Sindh. This is likely to stimulate the increase in cotton imports during fiscal year 26, which continued the country’s import bill.
Beyond immediate food shortages, flooding effects should be broken in various sectors. The fertilizer industry provides for a “clear drop in demand” while agricultural activities stop in the affected areas.
The automotive sector, especially passenger cars and 3 wheels, will probably see a drop in sales of rural areas due to the weakened agricultural economy.
Building materials should also feel a slowdown in dispatches due to the disturbed construction activities, although post-runing reconstruction may possibly rebound the demand.
The report also provided for a potential drop in sales volumes for petroleum products, as travel and economic activity are disturbed in affected areas.
The financial sector is not immune either. Although a major drop in deposits is not planned, commercial banks may suffer “a certain loss of income due to disturbances in the branches”.
More worrying is the “expected push of the NPL agroes” (non -efficient loans) due to the damage induced by the floods to customers, the infection report of the agricultural sector already at around 5% in March 2025.
The most critical long-term concern is perhaps the impact on the balance of payments in Pakistan. Floods are likely to “lead to the increase in the import bill of Pakistan, including an increase in food imports due to national shortages”.
Conversely, the export product may suffer due to the loss of production of key agricultural exports such as rice and other fruits. This double impact of the increase in imports and reduced exports will make the country’s already precarious external account more.
The basic affair of the report for the National Consumer Price Index (NCPI) for financial year 26 is now 7.8% in annual sliding, incorporating the impact of the prices of softer fuel in the future.
However, any “significant damage to cultures due to floods, especially in certain parts of Sindh and Punjab, is a risk of key increase for our projections”.
An increase in NCPI expectations also implies that “we do not provide any reduction in interest rates for the rest of the current exercise”, potentially hampering economic recovery.
