India’s Pahalgam Diplomatic Counter-Strike: Is Pakistan’s Economy Collapsing?

A new front may be opening in the India-Pakistan conflict — but this time, the battlefield isn’t just military... it's economic. As Pakistan warns that diverting Indus waters is an “act of war,” its own economy is teetering on the edge. Following India’s diplomatic push and firm stance on terror, Pakistan closed its airspace to Indian carriers — a move that may backfire. When it did the same in 2019 after Pulwama, it reportedly lost nearly $100 million in aviation revenue. Now, with India as the world’s 3rd largest aviation market, the loss could be even greater. Meanwhile, inflation is hitting the common Pakistani citizen hard. Media reports say rice is now at Rs 340/kg and chicken has surged to Rs 800/kg. A recent World Bank report warns that over 10 million Pakistanis are at risk of extreme food insecurity and even starvation this year. Foreign Minister Ishaq Dar has acknowledged the strain: “We don’t want to retaliate… We want to build our economy.” Can Pakistan afford a prolonged standoff with India? This report breaks down the financial fallout of rising tensions.