Pakistan, located between 23o 42´ to 37o 06´ N and 60o 54´ to 77o 52´ E is girdled by the dominating Himalayan ranges in the north under the influence of calms of cancer and shifting of doldrum, with greater part of the country experiencing arid climate alongwith recurring drought. The spatio-temporal variability in atmospheric water and thermal regime is reflected in the high variability of precipitation and resultant extended droughts and floods. Consecutive failure of precipitation leads to meteorological drought; reduced stream flow leads to hydrological drought, in turn resulting in agricultural drought which disturbs the agrarian economy. Pakistan being an agricultural third world country, its economic and hence social milieu is inherently influenced by its climatic variations and severities. Agriculture being the lynchpin of its economy, Pakistan’s GDP has declined from 50 to 22% from 1949-50 to 2009-10. The drought of 1998- 2002 was reported as the worst in the last 50 years. The study is based on the hypothesis that drought, among other natural disasters is the worst enemy of the economy of Pakistan and hence on its social set up. Searching a way out of this critical environmental condition is necessary for ameliorating the socio-economic status of this third-world country. Furthermore, all types of drought originate from meteorological drought in Pakistan. The objectives of the research include revelation of meteorological/climatological nature of drought, classification of Pakistan’s climate, alongwith demarcation of climatologically affected sectors. Determination of the effects of drought and desertification, identification of the relationship between teleconnection phenomena and annual precipitation are also included in the objectives. Determination of the effect of drought on river flow is related to the assessment of socio-economic impact of hydrological drought on the country, as agriculture is inherently related to water availability in the perspective of agricultural drought leading to socio-economic drought. Formulating methods of assessment of meteorological drought is essential from the prediction point of view, which is an essential part of the thesis. The study area encompasses the macro-area of Pakistan served by 51 meteorological observatories. Case study of three selected villages, representative of arid and semi-arid conditions from three most drought prone provinces has been made with the help of questionnaire surveys to collect first hand information of socio-economic impact of drought. Methodology of the study includes in its purview, processing of data collected both from primary as well as secondary sources. Assorted statistical softwares (viz. XLSTAT, MYSTAT, MiniTab, etc.), methods and self made routines have been applied in the temporal study and forecasting module. Some GIS (software) e.g., arcGIS, Surfer, etc. have been employed for spatial study, missing climate data mining, presentation as well as climatic forecasting analysis. Graphical method for missing climate data mining is one of the original contributions of this thesis, alongwith Standardized Rainfall Evapotranspiration Index (SREI), which has been proposed for drought monitoring. The study has revealed that deficit in precipitation and insufficient water resources are the major cause of vulnerability to drought. Hydrological, agricultural and socio-economic droughts are rooted in meteorological drought. Increasing trends of mean temperatures and high potential evapotranspiration dominates throughout the country; which is a sign of climate change. The global source and sink teleconnection phenomena, La-Nina plays a vital role in maneuvering precipitation regions in Pakistan. Droughts severely impact the agricultural productivity and subsequently the rural social status. In order to aid in climatological forecasting a modified formula has been proposed, as an original contribution in the thesis, for calculating sunshine hours from total cloud amount, for the calculation of FAO PenmanMonteith Evapotranspiration. Suggestions for improving socio-economic conditions with reference to drought hazards include reductions in population growth rate and enhancement of agro-based business in order to improve social status of 80% of its population which is directly or indirectly related to agriculture. Development of new and enhancement of old water reservoirs is essential. Construction of small dams in the northern areas and barrages in the southern region cannot only help in reduction of floods but storage of water for use during droughts. Plantation of vegetation, capable of reducing salinity and enhancing water table conditions in the coastal areas e.g. coconut trees, may not only enhance the economy of the area but also improve soil conditions leading to enhanced agricultural productivity. Last but not least, a forecasting equation has been developed for assessing the country’s GDP growth rate based on climate and agricultural data.