Pakistani economic crisis (2021–2024)

Pakistan experienced an economic crisis beginning in late 2021 during the premiership of Imran Khan in the aftermath of the COVID-19 crisis, further intensified by the effects of the 2022 Russian invasion of Ukraine, political unrest in the country, and devastating floods in 2022. It caused severe economic challenges for years, including surging inflation causing food, gas and oil prices to rise, fuel shortages, a substantial weakening of the rupee, and a balance-of-payments crisis caused by declining foreign reserves. Decades of poor governance and low productivity per capita contributed to the crisis, leaving the country unable to earn enough reserves to fund its imports. In May 2023, Pakistan's CPI inflation rate reached 37.97%, the highest level ever recorded.

Pakistan's economic crisis served as the biggest crisis since its independence. It was on the verge of a sovereign default in early 2023 for the first time in its peacetime history. The Russian invasion of Ukraine caused fuel prices to rise worldwide, leading to a global energy crisis. Excessive external borrowing by Pakistan over the years raised the spectre of default, causing the Pakistani rupee to rapidly fall in value and making imports more expensive in relative terms. Fuel shortages and surging inflation in late 2021 contributed to the crisis, and by June 2022, inflation was at an all-time high, along with rising food prices. The 2022 Pakistan floods exacerbated the crisis and caused major economic losses worth $30 billion. The national poverty rate rose significantly as a result of the crisis, going from 21.9% in 2018-2019 to 28.8% in 2024-25, a rise of about 6.9%.

As of 2025, the Pakistani economy is showing signs of gradual macroeconomic recovery and stabilization. In June 2025, Pakistan led emerging markets to become the most-improved country in sovereign credit risk, seeing a 12% decline in default risk. In April 2025, the headline inflation rate hit a historic low of 0.3%, the lowest in Pakistani history, primarily as a result of declining global commodity and energy prices, a stable exchange rate, a high base effect, recovering foreign reserves, and tight monetary policy. Total foreign reserves held by the state bank rose to a record high of $16.055 billion in January 2025, and the Pakistani rupee has stabilized at a rate of around 280 rupees per dollar since 2023.