By Nasim Ahmed
2025 was a turbulent year for Pakistan, marked by a resurgence in international relevance amid continuing domestic challenges. During the country attracted global attention through military assertiveness, diplomatic gains, and hosting major events, while striving for economic recovery amid political tensions, security threats, and natural disasters.
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The year’s defining event was the May 2025 India-Pakistan conflict, triggered by a terrorist attack in Pahalgam (Indian-occupied Kashmir) on April 22, killing 26 civilians. India launched missile strikes (Operation Sindoor) on May 7, leading to intense four-day clashes—the most serious since 1965. Pakistan downed at least five Indian jets using advanced capabilities, including Chinese-supplied systems, boosting its military credibility. A ceasefire was reached on May 10, mediated in part by U.S. President Donald Trump.
At the same time, Pakistan made significant diplomatic wins, stepping back into the spotlight after the elapse of many years. Relations with the U.S. warmed under President Trump, with cooperation on counterterrorism and economic deals; Pakistan nominated Trump for the Nobel Peace Prize for crisis de-escalation roles. Ties with China deepened via CPEC Phase II and validated Chinese weapons in combat. Strengthened alliances included a mutual defence pact with Saudi Arabia and expanded trade with Iran. At the UN, Pakistan gained traction on the Kashmir issue. Pakistan maintained its two-year term on the United Nations Security Council (UNSC), engaging in global diplomacy and contributing to international peace discussions, a key milestone for its foreign policy presence.
Domestic politics remained polarized, with the military consolidating its influence in the conduct of national affairs. Political tensions continued between major parties and state institutions throughout 2025, with frequent debate over constitutional powers and governance reforms. Ongoing restrictions on the Pakistan Tehreek-e-Insaf, including suppression of rallies and allegations of electoral interference from prior years, continued to fuel tensions. US think tank Freedom House downgraded Pakistan’s political rights score, citing the growing imbalance in civil-military relations. PTI protests persisted but lost momentum, and the government under Prime Minister Shehbaz Sharif maintained control, though critics highlighted creeping authoritarianism through constitutional amendments.
In the economic arena, modest recovery continued, with GDP growth around 2.5-3.0% (fiscal year ending June 2025), current account surplus, and inflation dropping to historic lows (0.3% in April) before rising to 6% due to floods. Interest rates were cut significantly, and reforms progressed, including privatization efforts (e.g., PIA).
However, growth remained below potential, hampered by floods wiping 0.5% off GDP, corruption losses (5-6.5% of GDP), and external pressures.
Talks with the International Monetary Fund (IMF) continued around financing, reforms, and compliance with loan program conditions. Public debt levels rose significantly, with total debt surpassing PKR 76 trillion by March 2025, emphasizing fiscal strains. There were discussions about public sector pay increases and pension rises, even amid IMF pressures for fiscal restraint. Organizations like the World Bank revised growth expectations to 2.7 % and cautioned that deeper structural reforms are needed to drive sustainable performance and reduce poverty. Despite some stabilizing economic indicators, Pakistan faced ongoing structural issues related to investment climate, debt levels, and human development. These concerns underscore the long-term reforms needed for sustainable growth and social wellbeing.
2025 was a violent year in the periphery. Escalating attacks from the TTP and BLA in KP and Balochistan claimed over 800 lives, including a tragic attack on a school bus in Khuzdar. Cross-border skirmishes with Afghanistan and insurgencies by TTP and Baloch Liberation Army intensified, with major attacks including train hijackings and suicide bombings.
Pakistan hosted the ICC Champions Trophy in February-March, its first major ICC event since 1996, symbolizing a return to international cricket on home soil. The national team had mixed results: inconsistencies in bilateral series but emerging talents. The Pakistan Super League (PSL 10) proceeded despite delays from the May conflict, with Lahore Qalandars winning. In youth cricket, Pakistan U19 won the ACC U19 Asia Cup final against India.
Devastating monsoon floods during June-September caused over 1,000 deaths, including many children, injured thousands, destroyed hundreds of thousands of homes, and displaced millions. Khyber Pakhtunkhwa and Punjab were hardest hit by flash floods, glacial lake outbursts, and river overflows. Climate change exacerbated vulnerabilities, with infrastructure damage and disease risks compounding recovery challenges.
Space achievements included SUPARCO launching multiple satellites and initiating astronaut/lunar programs. In the arena of global diplomacy Pakistan hosted SCO summit and national pride events. Overall, 2025 positioned Pakistan as strategically ascendant abroad—leveraging geography, military prowess, and diplomacy—while domestic instability, security threats, and climate impacts underscored fragility. The year offered opportunities for sustained reforms and underlined the need for addressing internal divides.
Pakistan enters 2026 with its strongest economic fundamentals in five years, but its social and security fabric remains frayed. The year 2025 proved that while the state can be stabilized through technocratic management and IMF discipline, nation-building requires a political consensus that is lacking at the moment.
