Economic loss from floods in Pakistan reaches $18b

Economic loss from floods in Pakistan reaches $18b


The cost of a rapid assessment of projected economic damage after the flood, calculated by the center and approved by the provinces, rose further to $1.7 billion to $18 billion.

Economic damage increased further, mainly because crops were destroyed on 8.25 million acres, compared with a preliminary estimate of 4.2 million acres. Cotton, rice and small crops were severely damaged and could cause serious problems for wheat planting if not properly dehydrated.

Cotton crops have evaporated in much of the country and now wheat planting is under threat.

The Ministry of National Food Security has been tasked with presenting a summary to raise the minimum support price for wheat for the upcoming crop. Authorities held meetings with international donors and assured them that Pakistan would put in place an effective monitoring and assessment system that would use every penny in a transparent manner to mitigate flood damage.

“The UN Secretary-General will be on a three-day visit on Friday (today) and Islamabad will share the cost of the rapid assessment with him. A separate study of damage and needs assessments is being carried out by international donors under the supervision of the World Bank, and the figures will then be examined. Check it out,” an official source told the news on Thursday.

The Ministry of Planning is undertaking a work to cut the Public Sector Development Programme (PSDP) by Rs 250 to Rs 30,000 crore to reduce it from Rs 8,000 crore to Rs 500-5,500 crore in the current fiscal. These resources will be transferred to flood-affected areas.

When contacted, Minister of State for Finance Aisha Ghaus Pasha and inquired about the latest rapid assessment cost, she refused to share the exact information and said that the cost had escalated and efforts were underway to finalise it by giving a cut-off date.

Under the rapid assessment exercise, the government had initially envisaged the cost of economic losses to the tune of $10 to $12.5 billion but the revised estimates suggested that the accumulated cost of economic losses had escalated up to $17 to $18 billion.

The per capita income is projected to slow down in the wake of the reduced GDP growth. The government had envisaged a GDP growth rate of 5 percent for the current fiscal year. The IMF had recently projected that the GDP growth would be standing at 3.5 percent for the current fiscal year. However, the floods damaged the agriculture sector and the industrial sector also gave an indication of slowing down, so the GDP growth might be below two per cent.

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