Peshawar

New Year, Old Fear

What does the year 2025 hold for Pakistan’s political, economic, and digital landscape?

By Shakeel Ahmed Shah | February 2025

New Year Old Fear
The arrival of a new year typically heralds a sense of optimism and renewal. Yet, as 2025 unfolds, Pakistan faces a daunting array of challenges threatening to derail its progress and deepen existing anxieties. The confluence of political instability, economic distress, and a widening digital divide casts a long shadow over the nation, demanding urgent and decisive action to steer it towards a more prosperous and equitable future.

Firstly, like previous years, the political landscape remains a source of profound concern. Deep-seated divisions continue to plague the nation, with political discourse frequently degenerating into acrimony and hostility. While Pakistan’s democratic institutions have evolved over time, their capacity to withstand systemic pressures and maintain a balance of power remains constrained. Over the years, key governance sectors have reflected subtle influences from various quarters, which critics argue could blur the lines between civilian authority and institutional independence. Such dynamics necessitate transparent governance, where decision-making processes reflect a collective, civilian-led consensus.

The challenges of managing populist narratives further complicate the political spectrum. As evidenced during the 2024 general elections, emotional appeals and misinformation have significantly shaped public opinion, often detracting from substantive policy debates. Social media platforms, while a critical tool for communication, have also been weaponized, spreading divisive rhetoric that fosters mistrust. The impact of this milieu will plague the year 2025 as well. Going forward, Pakistan’s ability to manage its political trajectory depends on fostering inclusive dialogue, respecting dissent, and addressing institutional reforms that reflect the aspirations of a democratic polity.

Secondly, the economic outlook also remains grim. Although inflation was maintained at single digits during the previous year and in the first month of 2025, dwindling foreign exchange reserves and mounting national debt present formidable obstacles in 2025. Pakistan’s reliance on international financial assistance, most notably from the International Monetary Fund (IMF), has provided short-term relief but at significant social cost. The austerity measures accompanying IMF programs have disproportionately affected marginalized groups, reducing subsidies on essential commodities while increasing taxes.

The global energy crisis continuing from 2023 into 2024 led to shortages and skyrocketing energy and fuel prices. With the global crisis taking new shapes, the challenges will cascade in 2025. Also, the 2024-25 budget, which saw a shortfall for the agriculture sector, is casting a shadow on the agriculture sector, contributing nearly 24% to the national GDP. On the other side, food insecurity is likely to remain a pressing issue, with the World Food Programme estimating that over 40% of the population experiences some form of food deprivation. These challenges will most likely affect rural communities and low-income households disproportionately in 2025 as well, many of which lack access to essential services and safety nets.

Overreliance on traditional sectors such as agriculture and textiles leaves the economy vulnerable to global market fluctuations. Investments in technology, renewable energy, and value-added industries could offer pathways for sustainable growth. Additionally, fostering trade partnerships and enhancing regional connectivity through initiatives like the China-Pakistan Economic Corridor (CPEC) could bolster long-term economic resilience. However, these efforts require prudent planning and implementation, avoiding pitfalls of mismanagement and corruption.

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