Business
Floods to famine: how 2025 could trigger economic crisis | The Express Tribune
LAHORE:
Pakistan is staring down the barrel of a food security emergency that could ripple through every layer of its economy. The catastrophic monsoon floods of 2025 have submerged vast swathes of the country, from Punjab’s wheat belt to Sindh’s rice-growing districts and parts of Khyber-Pakhtunkhwa.
Over 2,000 villages have been inundated, displacing millions, wrecking farmland, and wiping out critical infrastructure just as the summer harvest reached its peak.
The destruction is staggering. Entire standing crops of wheat, cotton, rice, maize, and sugarcane have been destroyed. In Punjab alone, 80% of the country’s wheat production is now at risk. Sindh’s rice fields and fodder supplies are underwater, while Khyber-Pakhtunkhwa has lost tens of thousands of acres of maize and vegetables.
Livestock losses are mounting, with fodder destroyed and surviving cattle starving. Farmers are reporting personal losses in the millions, collectively wheat farmers alone have seen over Rs2.2 trillion wiped out since last year.
The ripple effects are already visible in markets nationwide. In Lahore, Karachi, and Peshawar, staple food prices have spiked 30% to 70%, with shortages of vegetables, milk, and meat now commonplace.
For urban consumers, the pinch is immediate and painful. For rural producers, the pain is existential, as fields, homes, livestock, and seed stores have been swept away.
Tens of thousands of families now live in makeshift camps, with their livelihoods gone and no clear path to recovery. If left unsupported, millions risk falling below the poverty line, a repeat of the 2022 floods which pushed nine million Pakistanis into poverty, according to World Bank estimates.
The economic stakes are immense. Agriculture contributes 24% of Pakistan’s GDP and employs 40% of the workforce. The loss of this year’s harvest will not just hurt farmers; it will force Pakistan to import vast quantities of wheat, vegetables, and cotton, straining foreign exchange reserves and driving up the import bill.
At the same time, export earnings will collapse as rice and cotton surpluses disappear. This dangerous combination, higher imports and falling exports, threatens to widen the current account deficit and weaken the rupee.
Inflation, which had eased to 4.1% in July 2025 after painful reforms, is now set to surge again. Government officials are bracing for food inflation to return to double digits by October, with shortages of wheat and fresh produce driving price shocks. Urban and rural consumers alike will feel the squeeze, and political tensions are certain to rise as household budgets buckle under the pressure.
The floods also pose a fiscal nightmare. Relief and reconstruction costs will run into hundreds of billions of rupees, forcing the government to divert funds from other priorities or take on new debt. Under an IMF programme, fiscal space is already limited. Every rupee spent on relief is a rupee not spent on development, creating a vicious cycle of stagnation and instability.
Making matters worse, policy missteps have amplified the crisis. At the very moment when Pakistan needed stability and strategic reserves, the government moved to dismantle Passco, the only institution capable of safeguarding emergency wheat stocks and stabilising prices. Passco’s warehouses, which once held two million tons of grain, are being liquidated under IMF dictates.
Simultaneously, the abolition of the Utility Stores Corporation has stripped millions of poor households of access to subsidised food. This has left farmers at the mercy of profiteering cartels and consumers defenseless against runaway inflation.
The World Bank’s latest report warns that climate shocks are now the single biggest threat to Pakistan’s macroeconomic stability. Floods are no longer rare, one-off events, they are recurring economic shocks that depress growth, widen deficits, and push millions into poverty. The 2025 disaster is a textbook case – rising inflation, mounting imports, shrinking exports, and deepening social instability.
There are still steps that can prevent a slide into famine. Emergency imports of wheat and vegetables, temporary price controls, and targeted cash transfers to vulnerable families can stabilise the situation in the short term. Equally critical is direct support for farmers – seeds, fertiliser, and credit must be provided immediately so the upcoming Rabi winter wheat crop is not lost. Without this, Pakistan will face even deeper import dependency and food insecurity in 2026.
Longer term, Pakistan must finally invest in climate resilience. Flood defences, drainage systems, climate-smart seeds, and reliable strategic reserves are not luxuries; they are necessities for national security. As the World Bank notes, economic planning must now treat climate volatility as a core structural challenge, not a peripheral issue.
The 2025 floods are not just another disaster. They are a stark warning. If Pakistan does not act decisively, this year’s tragedy will not only wash away crops and homes, it will erode the very foundations of our economy and leave the nation vulnerable to the next inevitable shock.
The writer is a graduate of the University of British Columbia
The future of bus firm Alexander Dennis has been “secured” by a £4 million furlough scheme, John Swinney has said.
The First Minister announced the move on Monday in hopes of avoiding the firm pulling out of Scotland and consolidating its operations at a single site in Yorkshire and saving 400 jobs.
The furlough scheme – the first of its kind to receive Scottish Government backing – will kick in when the firm signs a new order and will act as a “bridge to future”, supporting staff between the signing of a deal and the beginning of work.
Under the agreement, 80% of wages will be covered by the Scottish Government, while the company will pay the remainder, with the scheme funded for up to six months.
Speaking to the PA news agency at the Alexander Dennis site in Falkirk, the First Minister said: “I want to do everything I can in whatever circumstance to protect employment within Scotland, and especially manufacturing employment, because that generates significant wealth in the Scottish economy.
“I gave the company a commitment back in May that we would leave no stone unturned in finding a way through this with the company if they remain committed to manufacturing here in central Scotland.
“The company has demonstrated that commitment.”
He added: “I’m very confident that Alexander Dennis has got a positive outlook on orders and on business, that’s a change in situation from earlier on in the year, and what the Scottish Government is providing is essentially a bridge to the future to allow the company to realise and deliver on those orders.”
The furlough scheme could be cut short if work begins earlier than the 26-week limit, the First Minister added.
Alexander Dennis president and managing director Paul Davies told a Holyrood committee earlier this year the firm would need to secure between 70 and 100 bus orders by the end of the year as well as between 300 and 400 next year to be viable.
Responding to the news, Mr Davies said the company was “deeply grateful”.
“This announcement marks a turning point. The Scottish Government’s support allows us to propose a new outcome to our statutory consultation,” he said.
“This has been made possible by collaboration, determination and a shared belief in the value and future of domestic manufacturing.”
While new Scottish Secretary Douglas Alexander said the UK Government had been “leading intensive work” to save the jobs on the site.
“I warmly welcome Alexander Dennis’s decision which will see the company’s Falkirk and Larbert sites remain open and operational. This will be relief to the talented workforce,” he said.
“The UK Government has been leading intensive work with partners, including the Scottish Government, and actively encouraged the furlough scheme that has been announced today.
“Future orders are key to the long-term success of companies like Alexander Dennis.
“Alongside Mayors who have delivered thousands of orders, we will continue to do all we can to support our domestic bus manufacturers.”
The Scottish Tories welcomed the announcement, but MSP Stephen Kerr urged the Government to ensure the move “protects jobs in the long-term”.
Meanwhile, the trade union Unite’s general secretary Sharon Graham said: “The immediate priority is now to secure new orders for Alexander Dennis which will protect hundreds of highly skilled jobs for years to come.”
Shares have dipped in BT after it said Indian billionaire Sunil Bharti Mittal and one his close executives will join the board of the UK telecoms giant.
The company’s shares fell by around 3% in early trading as shareholders took the move as a signal that Mr Mittal will increase his influence on the direction of the firm.
On Monday, BT confirmed that the founder of Indian conglomerate Bharti Enterprises will become a non-executive director of BT and join the firm’s nominations committee.
It said Gopal Vittal, vice chairman and managing director of Bharti Airtel, will also join the BT board as a non-executive director.
BT said the appointments are part of a “relationship agreement” between the company and Bharti Global.
It means the group will be able to hold two roles on BT’s board while it holds a stake of at least 20% in the business.
This would reduce to one seat on the board if the stake falls to between 10% and 20%.
It comes after Mr Mittal’s Bharti vehicle bought a 24.5% stake in BT from French media and telecoms tycoon Patrick Drahi last year.
BT chairman Adam Crozier said: “We’re delighted to welcome Sunil and Gopal to the board of BT.
“They bring significant experience and global perspectives in the telecoms industry, and we look forward to their contribution to the board and to the future success of BT Group.”
Mr Mittal said: “I am delighted to be joining the board of BT, an iconic company delivering critical infrastructure and services for the UK.
“I look forward to working with chairman Adam Crozier, the board and chief executive Allison Kirkby to drive forward the strategy to win in the market and deliver world-leading services for BT’s customers.”
Business
Gold vs Sensex: Gold beats Sensex with 50.1% returns; outperforms over three, five, ten & twenty-year periods – The Times of India
Gold vs Sensex: Gold has delivered superior returns compared to Sensex over a several year horizon. Gold has surpassed domestic equities in terms of returns, primarily due to unprecedented buying by global central banks and investors seeking protection against inflation. The precious metal has yielded 50.1% returns in rupee terms during the last year, whilst the Sensex declined by 1.2%.The significant uptick over the past year can be attributed mainly to central banks’ acquisitions, as uncertainties related to trade disputes have increased the appeal of secure investments, according to an ET report.“Central banks continue to buy gold with about 25% of purchases coming from them,” says Sridhar Sivaram, investment director at Enam Holdings. “They are buying gold because of the ongoing tariff wars and as a diversification against the US treasury,” he was quoted as saying.
Gold outperforms Sensex
Gold has demonstrated superior performance compared to Sensex across multiple timeframes spanning three, five, ten and twenty years.In the past three years, gold yielded an annual return of 29.7%, surpassing the Sensex’s 10.7%. The five-year performance shows gold achieving 16.5% returns, slightly higher than the Sensex’s 16.1%.Looking at longer periods, gold’s performance remained robust with 15.4% returns over a decade, exceeding the Sensex’s 12.2%. The two-decade analysis reveals gold maintaining 15.2% returns compared to the Sensex’s 12.2%.
Why are gold prices rising?
Experts indicate that countries are shifting away from dollar-based reserves towards gold holdings. They recognise gold as a reliable value repository and protection against currency deterioration.“Gold extends beyond being only a hedge against inflation, as the US Federal Reserve is on the stage to start cutting interest rates with hotter inflation,” says NS Ramaswamy, head-commodity desk, Ventura securities.
Gold 995 – Mumbai
He further notes that anticipated US Federal Reserve rate reductions this month and ongoing uncertainty regarding President Donald Trump’s tariff decisions will sustain gold’s strong position.Recently, gold prices on Comex reached an unprecedented $3,715.2 per troy ounce, whilst silver exceeded $43, achieving its highest value in 14 years.
What is the outlook for gold prices?
Experts indicate that with gold prices having already surged 38%, future increases might be more modest. Nevertheless, portfolio diversification should include gold allocation between 10-15%. “Investors should continue to allocate 10% to gold in their portfolios as it is the only hedge against currency, but you should not expect returns to be as high as the previous year,” said Sivaram.For optimal investment strategy, Ramaswamy suggests maintaining 15% gold allocation, recommending purchases during price corrections.Recent significant price appreciation has led several market observers to favour equity investments over gold.According to research by Edelweiss Mutual Fund comparing Sensex to Gold ratios, gold currently appears overvalued relative to equities. Historical data suggests equity outperformance when the ratio dips below 1, whilst higher ratios typically indicate stronger gold performance.“The current ratio is 0.76, which is below the long-term average of 0.96,” Niranjan Avasthi, SVP and head- product, marketing & digital at Edelweiss Asset Management. “In the past when this ratio had been below 0.8, the BSE Sensex has given an 3 year average forward return of 25.12% compared to gold that could return 7.21%.”(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
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