Climate shocks are emerging as a growing threat to Pakistan's economic stability, with experts warning that extreme weather is no longer only an environmental issue but a challenge capable of disrupting agriculture, food security, employment, public finances and long-term economic growth.

Climate specialists told Business Recorder that Pakistan's economy remains highly exposed to weather-related risks because of the central role agriculture plays in national output and livelihoods. They argued that future economic crises could stem as easily from climatic disruptions as from financial instability, warning that "the next economic crisis may begin not with a failed bank, but with a failed monsoon."

According to climate expert Khan Faraz, agriculture contributed 23.4 percent to Pakistan's Gross Domestic Product and employed more than 33.1 percent of the country's labour force. Despite devastating floods, the sector expanded by 2.89 percent during fiscal year 2025-26, nearly doubling last year's growth of 1.53 percent, as stronger wheat, sugarcane and rice production helped the farm economy demonstrate greater resilience than expected.

The sector's overall performance was supported by a 3.75 percent expansion in livestock, alongside growth of 1.66 percent in fisheries and 2.02 percent in forestry, highlighting the importance of agriculture and allied sectors to the broader economy. Other experts cautioned that climate change now extends well beyond environmental concerns, directly affecting productivity, inflation, employment, public finance and economic growth. They argued that recurring climate shocks threaten agricultural production, food security and rural livelihoods, increasing the country's economic vulnerability.

They also highlighted the limited capacity of farmers to absorb climate-related losses. Nearly 70 percent of farmers cultivate fewer than five acres of land, while less than two percent of agricultural losses are insured, leaving most rural households exposed to extreme weather events with little financial protection. The experts further warned that repeated spending on reconstruction following climate disasters diverts scarce public resources from long-term development. Every rupee spent rebuilding damaged infrastructure and livelihoods, they noted, is a rupee unavailable for future investment.

Khan Faraz called for a fundamental shift in policy, urging Pakistan to move from disaster response towards risk management, from relief to resilience and from fragmented institutional arrangements to integrated governance. He also stressed that farmers require fair markets, quality seeds, modern technology and stronger protection mechanisms if the country is to build a more climate-resilient agricultural sector capable of sustaining economic growth amid increasingly frequent weather-related shocks.