Pakistan–Afghanistan Border Closure: Economic Impact at a Glance

The suspension of Pakistan–Afghanistan trade since 10 October 2025 has created mounting economic pressure, particularly for Afghanistan, which depends on Pakistan for 41% of its exports and 14% of its direct imports. While Pakistan’s macroeconomic exposure remains modest—an estimated 0.5% (US$150–160 million) reduction in annual exports if the closure continues through year-end—the repercussions are more pronounced at the sector and company level. Key exporters such as PABC and North-based cement manufacturers face significant declines in sales and rising input costs due to the loss of Afghan coal supply, while pharmaceutical exporters may encounter temporary disruptions.

Amid returning Afghan refugees, rising inflation, declining aid flows, and recent natural disasters, Afghanistan’s demand for imports is increasing, making a prolonged shutdown of the border economically unsustainable. Ensuring smooth trade and transit is key to regional stability, and hence interventions are needed to prevent further economic fallout, say the experts.

Read more in this report by JS Global.