Making things worse for Pakistan; a World Bank report said that more than 10 million people in Pakistan could face extreme food insecurity and starvation this year.
Two things are on table. Prime Minister Narendra Modi's '56 inch chest', his assertive politics, bravado at times and of course the public fury and 'urge' for a befitting response.
So far going has been smooth. The Modi Govt has given clear messages - even the unprecedented one that's about Indus water flow.
The water flow has already started having repercussions and by all indications Islamabad is nervous.
India is ready but by all accounts and reports those can be analysed suggest - Pakistan cannot afford a war - it's in bad shape Financially; Diplomatically it's isolated and military-strategically its much weaker than India.
Air Force officer Abhinandan was held by Pakistanis in 2019 but the then Prime Minister Imran Khan was forced to release him 'safe and sound'.
In 2025; post-Pahalgam suspending the Indus Water Treaty (IWT) will not satisfy the Indian public, which is outraged.
Modi himself has raised the expectations bar by two strikes in 2016 and 2019.
Modi done the hardliner-reaction after the terror attacks in Uri in 2016 and in Pulwama in 2019.
In Uri, after four Pakistan-backed Jaish-e-Mohammed (JeM) terrorists stormed the Indian Army brigade unit on September 18, 2016, killing 19 soldiers, India retaliated strongly 10 days later.
Not heard of by Indians as well as Pakistanis; Indian army commandos crossed the Line of Control (LoC) and conducted a series of retaliatory surgical strikes on militant launch-pads.
Probably 150 militants were eliminated and the best thing Pakistan could do was denial.
In 2019, after Pulwama tragedy that killed 40 Central Reserve Police Force men, India struck back by sending 12 Mirage 2000 jets into Pakistan territory and bombing the JeM camp in Balakot.
Importantly, it was the first time in decades since the 1971 war that India had deployed its air force for any operation and cross-border strike against Pakistan.
In 2025, the big question probably international community is trying to answer is - Can Pakistan afford to fight ?
On the economic front; the high inflation is a matter of big worry.
Unemployment has shot up to 7 percent. Millions of people are unemployed. Pakistan is for all purposes today surviving on IMF dole out.
It's unemployment rate is currently at 7.5%, with approximately 6.36 million people unemployed. This is a significant rise from the 6.3% unemployment rate in 2020-21.
The number of unemployed workers has also increased from 4.5 million in 2020-21 to 18.7 million in 2023.
The IMF approved loans of $2 billion in March this year to bail it out and inflation dropped to 0.7%, a three-decade low, as per the Pakistan Bureau of Statistics (PBS), showing signs of an economic recovery after having reached a record high of 38% in May 2023.
But all the economic recovery could come to a halt as Pakistan could be facing a deep economic crisis after the Indian government took strict diplomatic actions following the Pahalgam terror attack in Kashmir.
The government’s reaction to the terror attack includes halting bilateral trade with Pakistan, expelling Pakistani officials from the High Commission, cancelling visas under the Saarc Visa Exemption Scheme, and suspending the Indus Waters Treaty.
Each of these actions is expected to put more pressure on Pakistan’s already fragile economy.
Pakistan’s economy is already in bad shape, and the situation is likely to get worse. Inflation could rise again after having eased in recent times. Pakistan’s central bank expects the country’s average inflation for the fiscal year ending June 2025 to range between 5.5% and 7.5%.
Reports suggest that the prices of basic food items like rice, flour, vegetables, fruits, and chicken have surged sharply. As per media reports, the price of rice has jumped to Rs 340 per kg, while chicken price has surged to Rs 800 per kg.
The end of India-Pakistan trade is expected to make this problem even more severe.
The International Monetary Fund (IMF) cut Pakistan’s economic growth forecast to 2.6% for this fiscal year in a report on April 22, down from the earlier prediction of 3% made in January.
Pakistan is heavily dependent on loans from the IMF, particularly the 37-month Extended Fund Facility (EFF), making the IMF's assessment very important for the country.
A World Bank report said that more than 10 million people in Pakistan could face extreme food insecurity and starvation this year.
The report pointed out that poor climatic conditions are likely to hurt the production of major crops like rice and maize.
One of the immediate effects of halting trade could be a shortage of critical pharmaceutical goods in Pakistan.
Pakistan's imports from India stood at around $304.93 million for the year 2024, based on data from the United Nations COMTRADE database, which tracks global trade flows. A significant chunk of this import value came from just two categories: organic chemicals and pharmaceutical products.
Organic chemicals made up the largest share, accounting for approximately $164.19 million. This includes a range of compounds used in various industries, particularly in manufacturing and healthcare.
Pharmaceutical products followed closely, with imports worth about $120.86 million. These likely consist of essential medicines, active pharmaceutical ingredients (APIs), and other healthcare-related products.
The World Bank has also lowered Pakistan’s economic growth forecast to 2.7%.
It warned that the government led by Prime Minister Shehbaz Sharif might fail to meet its budget deficit targets, and the country’s debt-to-GDP ratio is likely to rise even further.
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