Pakistan Floods: Economic loss to the tune of USD 12.5 billion

• Image Credit: Google

• Sep 5, 2022 | Guriya Khatun

Reports claimed that the country's GDP growth is expected to fall by 3% and would be hovering around 2% of GDP on the eve of the budget for 2022–23, down from the earlier anticipated growth rate objective of 5%.

Digital Desk: The estimated economic loss to Pakistan from floods has increased from USD 10 billion to USD 12.5 billion.

There were fatalities as a result of the devastating floods in Pakistan. According to Geo News, inflation is expected to increase to a range of 24% to 27% and reach 30% for the current fiscal year.

Additionally, from 21.9 to over 36 percent, poverty and unemployment will increase significantly. Pakistani government estimated that after floods in 118 districts, 37% of the population was affected by poverty.

A prominent committee that included representatives from the ministries of finance, planning, the state bank of Pakistan, the FBR, PIDE, and other organisations found that unemployment and poverty have increased significantly, going from 21.9% to more than 36%.

Although there has been a large increase in unemployment, the administration has opted to publish any figures after consulting with the appropriate parties.

Before the recent devastating floods, the jobless rate was 6%. According to official sources, the GDP growth for the current fiscal year will be reduced from 5% to 2%.

The State Bank of Pakistan announced that growth would be lowered from 4% to 4.5% to 2% for the current fiscal year., The News reported.

Following the floods, the impact on agriculture growth was much more severe, and the current fiscal year's potential value addition of over Rs500 billion for the sector may not materialise. Both the services sector and the objective for agricultural expansion were severely impacted.

Reports claimed, the country's GDP growth is expected to fall by 3% and would be hovering around 2% of GDP on the eve of the budget for 2022–23, down from the earlier anticipated growth rate objective of 5%.

The SBP's algorithm is expected to determine losses based on disrupted economic operations struck in all districts and tehsils in the flood-affected areas, which might make the already severe economic losses worse.

The SBP has been evaluating the precise losses experienced by the agricultural sector using satellite imagery from SUPARCO. In order to determine the total accumulated losses to agriculture and physical infrastructure, Google has also offered its services to the government.

The country's last flood, which occurred in 2010, had damage in 78 districts, but the recent floods' intensity could be judged by the fact that it had affected 118 districts of those areas, which are important centres of economic activity.