1/15 State Bank of Pakistan just issued its mid-year review claiming floods "may pose fresh challenges" to economic recovery. This language shows institutional blindness to what's happening across Pakistan's agricultural heartland.
2/15 SBP says agriculture has a "relatively contained share" in loan portfolios so banking sector soundness remains "immune" to flood damage. Tell that to the 4 million people affected nationwide, where over 1 million acres of cropland is underwater in Punjab alone.
3/15 The central bank's stress tests model "hypothetical shocks" while real climate disasters destroy the productive base that generates loan repayments. 883 people dead as of September 10, 4.225 million impacted. This isn't hypothetical.
4/15 SBP doesn't want to discuss this: Pakistan's Crop Loan Insurance Scheme only covers loan amounts, not actual crop losses. When floods destroy entire harvests, farmers get pennies on the dollar while banks pretend everything is fine.
5/15 SBP claims agricultural NPLs are manageable at 7.4% gross (negative 0.5% net) as of June 2025. But that's before current floods hit. Punjab alone has over 2 million people affected and 8,400 villages inundated with standing crops destroyed.
6/15 The bank talks about "easing financial conditions" boosting lending while rice prices are projected to surge from 3,200-3,600 rupees to 5,000-5,500 per 40kg due to flood damage. Someone isn't connecting the dots.
7/15 SBP's review mentions Pakistan's "improved credit rating" as supporting recovery. Pakistan just had to import 300,000 tonnes of grain sorghum from the US because floods destroyed domestic crops. How's that credit rating holding up now?
8/15 The central bank projects steady banking performance while cotton losses threaten textile exports—over half of Pakistan's export revenues—at the exact moment the country faces 19% US tariffs. This is economic malpractice.
9/15 SBP ignores cascade effects: Prime Minister Shehbaz Sharif declared a climate and agriculture emergency yesterday, yet SBP still sees "contained" risks. 6,138 livestock deaths nationally means thousands of loans lost their collateral.
10/15 Climate disasters happen annually now. 2022 floods cost $14.8 billion, pushed 9 million into poverty. 2025 floods are destroying millions more acres. SBP acts like this is an anomaly instead of Pakistan's climate reality.
11/15 The bank's Capital Adequacy Ratio of 21.4% means nothing when the productive economy generating loan repayments gets washed away every monsoon season. You can't stress test your way out of climate collapse.
12/15 Trade balance will deteriorate $1.9 billion in FY26 as cotton imports surge over $1 billion while rice exports fall $278 million, sugar $283 million. SBP calls this a "fresh challenge" instead of a structural crisis.
13/15 GDP growth revised down from 3.4% to 3.2%, agriculture forecast slashed from 2.2% to just 1.1%. PM declared climate emergency. But SBP still thinks banking sector remains "immune" to agricultural damage.
14/15 Most devastating: small farmers operate outside formal banking, so when disasters hit, they turn to predatory lending. SBP's insurance gaps create debt spirals that destroy rural communities while protecting bank balance sheets.
15/15 Pakistan's central bank is managing a 20th-century financial system while climate disasters reshape the economy annually. Their "measured assessment" isn't prudent—it's institutional blindness that will cost Pakistan dearly.
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