Air pollution costs 6.5% of GDP

Air pollution costs Pakistan an estimated 6.5% of GDP, while worsening air quality is also affecting worker productivity, business continuity and the country’s appeal to investors, The Express Tribune reported. The Overseas Investors Chamber of Commerce and Industry said pollution is linked to more than 248,000 premature deaths each year.

Net foreign direct investment fell 34% to $1.64 billion in FY26, and total foreign investment dropped 74% to $451 million. The State Bank of Pakistan has pointed to governance concerns and policy uncertainty, while experts cited in the report said environmental conditions also shape foreign businesses’ location decisions.

The report calls for stronger enforcement of emissions rules, cleaner transport and fuels, and action on industrial and other pollution sources. A World Bank-backed $300 million Punjab programme seeks to cut PM2.5 levels by 35% over a decade, including through 600 electric buses and 5,000 super seeders.