The Economic Crisis in Pakistan and Its Ripple Effects on PoK and Gilgit-Baltistan

The human toll is what hits hardest. In Muzaffarabad, a police officer died and dozens were injured in May 2024 clashes over rising costs—proof the frustration’s boiling over. In Gilgit, folks have marched for days against land grabs and power cuts, their banners screaming for rights Pakistan’s never granted.

- SYED JAHANZEEB,

Pakistan’s economy has been walking a tightrope for years now, and as of April 2025, it’s still teetering on the edge. Inflation has calmed down a bit—hovering at a modest 0.7% earlier this year, the lowest in decades—but don’t let that fool you into thinking the storm has passed. The country’s been battered by political chaos, soaring debt, and a reliance on foreign loans that’s left it gasping for air. For the average Pakistani, life’s gotten tougher, with prices for basics like food and fuel climbing faster than wages can keep up. But if you think that’s the whole story, take a step back and look beyond the mainland. Out in the rugged, mountainous areas of Pakistan-occupied Kashmir (PoK) and Gilgit-Baltistan, the economic crisis isn’t just a headline—it’s a daily grind that’s pushing people to their limits. These areas, already sidelined by Islamabad, are feeling the squeeze in ways that are raw, real, and often overlooked.

Let’s start with the big picture. Pakistan’s economic woes didn’t pop up overnight. Years of borrowing—think $220 billion in national debt by 2022—coupled with sluggish growth have painted the country into a corner. The numbers tell a grim tale: GDP growth has limped along at around 3% annually while debt ballooned at 14% a year during the past couple of decades. Add in global shocks like the Russia-Ukraine war spiking fuel prices and a political merry-go-round that’s left governance shaky, and you’ve got a recipe for trouble. The IMF’s stepped in with bailout after bailout—$6 billion here, $3 billion there—but the conditions attached, like cutting subsidies and hiking energy costs, hit the poorest the hardest. For a country where foreign reserves once dipped to a measly $2.9 billion in 2023, barely enough for three weeks of imports, recovery’s been more of a hope than a reality.