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Operation Sindoor Deepens Pakistan's Economic Crisis: Report

A Greek media report reveals that Operation Sindoor has deepened Pakistan's economic stress, with inflation projected to rise from 4.5% in 2025 to 8.4% by 2027. Investor sentiment was an early casualty, as rising sovereign risk perceptions delayed investment and increased costs. The tourism and aviation sectors suffered significantly, with international cancellations and cargo delays impacting key industries. Trade confidence weakened as buyers shifted sourcing to Bangladesh, Vietnam, and India, further straining Pakistan's fragile macroeconomic fundamentals.

Key Points: Operation Sindoor Deepens Pakistan's Economic Stress

  • Operation Sindoor raised inflation from 4.5% to 7.2% in 2026
  • Investor sentiment and sovereign risk perceptions worsened
  • Tourism and aviation sectors hit hard
  • Trade confidence weakened as buyers diversified to other countries
2 min read

Operation Sindoor deepens Pakistan's economic stress: Report

A Greek report says Operation Sindoor worsened Pakistan's inflation, investor sentiment, tourism, and trade, with GDP growth stagnating at 3%.

"Any disruption in connectivity raises costs not only for airlines but also for exporters, importers, and passengers. - Greece City Times report"

New Delhi, May 7

Operation Sindoor deepened Pakistan's economic stress in 2026, with investor sentiment, tourism, the aviation sector and exports emerging as major casualties of the military initiative, a report has said.

The report by Greek media house Greece City Times said the May 2025 military operation raised inflation, slowed growth, eroded confidence and worsened the country's already fragile macroeconomic fundamentals.

It intensified uncertainty for an economy already grappling with high debt obligations, external financing pressures, weak foreign exchange reserves and dependence on multilateral assistance.

The report further stated that investor sentiment was an early casualty as sovereign risk perceptions rose, delaying investment decisions, which raised insurance and borrowing costs.

Operation Sindoor eroded confidence and likely forced many investors into a wait-and-watch mode.

In 2025, the country faced recurring fiscal deficits, a narrow tax base and high debt-servicing costs.

"Household purchasing power had already been eroded by inflation in previous years. GDP growth had also stagnated at around 3 per cent on average over the last three years, reflecting weak industrial momentum, subdued investment, and limited productivity gains," it noted.

The tourism industry bore the brunt of the military operation as international travellers cancelled plans, hitting hotels, restaurants, tour operators and local communities dependent on tourism income. Aviation, already grappling with structural and financial stress, was another casualty of Operation Sindoor.

"Any disruption in connectivity raises costs not only for airlines but also for exporters, importers, and passengers. Cargo delays are particularly damaging for time-sensitive sectors such as textiles, perishables, pharmaceuticals, and light engineering goods," the report said.

Trade confidence weakened as international buyers diversified sourcing to Bangladesh, Vietnam and India, the report added.

Operation Sindoor also rekindled inflationary pressure as Pakistan's consumer price inflation is estimated to rise from 4.5 per cent in 2025, to 7.2 per cent in 2026 and further to 8.4 per cent in 2027.

- IANS

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Reader Comments

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Priya S
Sad to see any country suffer economically, even if it's Pakistan. War and military operations always hurt common people the most—the ones who had no say in their government's actions. Inflation going from 4.5% to 8.4% by 2027 means ordinary Pakistanis will struggle to buy even basic necessities. But then again, when your own army keeps provoking, what did they expect? 🤷‍♀️
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Sarah B
As an outsider looking in, it's fascinating to see how quickly a military operation can unravel an already fragile economy. The tourism and aviation sectors are often the canary in the coal mine. But I wonder if this report might be a bit one-sided? Every action has consequences, but sometimes the narrative gets shaped by who's telling the story.
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Vikram M
I'm all for strong action against terrorism, but we must also consider the human cost. The report highlights how international buyers are diversifying to Bangladesh, Vietnam, and India. That's not just a loss for Pakistan—it's a reminder that in today's globalized world, instability anywhere affects everyone. Still, Pakistan's leaders need to realize that sponsoring cross-border terror has real economic consequences. They can't have their cake and eat it too. 🎯
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Naveen S
From a purely economic perspective, this is a textbook case of how geopolitical tensions destroy business confidence. The report mentions 'wait-and-watch mode' for investors—that's death for any developing economy. But honestly, Pakistan's fundamentals were already terrible with high debt, low reserves, and tax base issues. Operation Sindoor just accelerated the inevitable. The real question is: will this finally force Pakistan to change its ways, or will they double down on the same failed strategies? Time will tell. 🇮🇳

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