ISLAMABAD: Pakistan’s cotton producers have made a remarkable comeback after suffering massive losses due to last year’s monsoon floods, with the commerce ministry announcing a 71 percent year-on-year growth in the ongoing year by issuing a brief statement on Tuesday.
Cotton is the main raw material of Pakistan’s textile sector which contributes about 60 percent to the overall exports of the country.
Torrential rains during monsoon last year triggered flash flood, destroying people’s houses and farmlands across much of the country.
The situation caused a huge setback to cotton production sector that experienced a 34 percent year-on-year decline, according to the official figures.
However, the ministry said in its statement that the “astounding 71 percent year-on-year growth” had “not only surpassed the previous year’s figures but also exceeded expectations.”
“Cotton arrivals crossing the 5 million bales mark on October 1, 2023, is a momentous achievement for Pakistan,” Dr. Gohar Ejaz, the interim commerce minister, said while commenting on the development. “Last year, our total crop was 5 million bales, and this year, we are anticipating a bumper crop of 12 million bales.”
“This remarkable growth showcases the dedication and hard work of our farmers and the resilience of our cotton industry,” he added.
The minister also promised to support and promote the cotton sector of the country, saying it had always played an “indispensable role” in Pakistan’s economic development and global competitiveness.
According to the textile industry stakeholders, the country’s cotton production has been shrinking in recent years.
“The cotton output in Pakistan is declining mainly due to the climate change-related issues and reduction in the cultivation area,” Chaudhry Waheed Arshad, a top official of Pakistan Cotton Ginners Association, told Arab News earlier this year in January.
Pakistan’s cotton production bounces back after last year’s losses, records 71 percent growth
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Pakistan’s cotton production bounces back after last year’s losses, records 71 percent growth
- The country witnessed a massive decline of 34 percent in cotton production last year due to the floods
- The government calls this year’s production level ‘momentous,’ expects a bumper crop of 12 million bales
IMF warns against policy slippage amid weak recovery as it clears $1.2 billion for Pakistan
- Pakistan rebuilt reserves, cut its deficit and slowed inflation sharply over the past one year
- Fund says climate shocks, energy debt, stalled reforms threaten stability despite recent gains
ISLAMABAD: Pakistan’s economic recovery remains fragile despite a year of painful stabilization measures that helped pull the country back from the brink of default, the International Monetary Fund (IMF) warned on Thursday, after it approved a fresh $1.2 billion disbursement under its ongoing loan program.
The approval covers the second review of Pakistan’s Extended Fund Facility (EFF) and the first review of its climate-focused Resilience and Sustainability Facility (RSF), bringing total disbursements since last year to about $3.3 billion.
Pakistan entered the IMF program in September 2024 after years of weak revenues, soaring fiscal deficits, import controls, currency depletion and repeated climate shocks left the economy close to external default. A smaller stopgap arrangement earlier that year helped avert immediate default, but the current 37-month program was designed to restore macroeconomic stability through strict monetary tightening, currency adjustments, subsidy rationalization and aggressive revenue measures.
The IMF’s new review shows that Pakistan has delivered significant gains since then. Growth recovered to 3 percent last year after shrinking the year before. Inflation fell from over 23 percent to low single digits before rising again after this year’s floods. The current account posted its first surplus in 14 years, helped by stronger remittances and a sharp reduction in imports. And the government delivered a primary budget surplus of 1.3 percent of GDP, a key program requirement. Foreign exchange reserves, which had dropped dangerously low in 2023, rose from US$9.4 billion to US$14.5 billion by June.
“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said in a statement after the Board meeting.
But he warned that Islamabad must “maintain prudent policies” and accelerate reforms needed for private-sector-led and sustainable growth.
The Fund noted that the 2025 monsoon floods, affecting nearly seven million people, damaging housing, livestock and key crops, and displacing more than four million, have set back the recovery. The IMF now expects GDP growth in FY26 to be slightly lower and forecasts inflation to rise to 8–10 percent in the coming months as food prices adjust.
The review warns Pakistan against relaxing monetary or fiscal discipline prematurely. It urges the State Bank to keep policy “appropriately tight,” allow exchange-rate flexibility and improve communication. Islamabad must also continue raising revenues, broadening the tax base and protecting social spending, the Fund said.
Despite the progress, Pakistan’s structural weaknesses remain severe.
Power-sector circular debt stands at about $5.7 billion, and gas-sector arrears have climbed to $11.3 billion despite tariff adjustments. Reform of state-owned enterprises has slowed, including delays in privatizing loss-making electricity distributors and Pakistan International Airlines. Key governance and anti-corruption reforms have also been pushed back.
The IMF welcomed Pakistan’s expansion of its flagship Benazir Income Support Program, which raises cash transfers for low-income families and expands coverage, saying social protection is essential as climate shocks intensify. But it warned that high public debt, about 72 percent of GDP, thin external buffers and climate exposure leave the country vulnerable if reform momentum weakens.
The Fund said Pakistan’s challenge now is to convert short-term stabilization into sustained recovery after years of economic volatility, with its ability to maintain discipline, rather than the size of external financing alone, determining the durability of its gains.
