Pakistan Floods: The rains and floods have caused huge destruction in Pakistan, due to which there has been a lot of economic damage to Pakistan Economy. According to preliminary estimates, the devastating floods have devastated Pakistan, causing economic losses of more than US$40 billion. The new economic damage data exceeds the US$30 billion figure given by UN Secretary-General Antonio Guterres, who visited Pakistan last week.
Pakistan released flood damage data
The Express Tribune reported on Tuesday that the figure of USD 40 billion was presented on Monday at a meeting of the National Flood Response Coordination Center (NFRCC) of the Flood Response Center, where the finance ministry “reported Pakistan’s loss”. An assessment report titled “A Preliminary Assessment of the Impact of Floods on the Economy” was presented. The preliminary appraisal report of the Ministry of Finance showed that the economic loss was around US$ 18 billion.
Planning Minister said – will compensate by taking loan from banks
Planning Minister and Chairman of NFRCC, Ahsan Iqbal said, “The devastating flood conditions suggest that the scale of flood damages ranges from US$ 30 billion to over US$ 40 billion. We are in the process of a comprehensive flood assessment. Huh.” The flood damage will be compensated with the help of the World Bank, the Asian Development Bank, the provincial and federal governments.
The Planning Minister said that the Finance Ministry had submitted a preliminary assessment of the flood damage, which was based on the analysis done for the time being, but the outcome of the model would depend on what inputs were given in it. “NFRCC has directed the Finance Ministry to put on hold the release of its flood impact report,” he said.
NFRC said – we will wait for the evaluation report
“We will await the outcome of the comprehensive assessment, but the damage is enormous and exceeds the US$30 billion recommended by the UN Secretary-General,” the NFRCC president said.
According to the government’s estimate, Pakistan’s GDP is also declining for the fiscal year 2022-2023 and it is likely to fall by three percent to five percent. Before the floods, the Finance Ministry had set a target of 5 percent economic growth. The IMF will consider any waiver of Pakistan’s $6.5 billion bailout program only on the basis of a credible assessment of the damage caused by the floods.
GDP may drop drastically
The government has said that if the deficit widens to $40 billion, it means that GDP growth this year could be negative and inflation could cross 30 per cent due to a complete breakdown of the supply chain. According to a finance ministry official, the preliminary assessment report showed that the overall loss in GDP growth due to floods would range from 3.3 per cent to 3.7 per cent. But if the deficit is revised to US$ 40 billion, then The economy will shrink.
according to sources. The interim report showed that about 20 percent of the Public Sector Development Program (PSDP), or Rs 218 billion, would have to go towards disaster relief spending, resulting in an additional 600,000 unemployment due to under-spending.
In the interim report, the Finance Ministry has reduced the negative impact on trade deficit due to floods to USD 2 billion from the initial USD 4 billion. It did not provide any additional impact on the current account deficit, as against the earlier figures of $5 billion from $4 billion.
Finance Ministry said poverty will increase more difficult
The Finance Ministry report said that the devastating floods have adversely affected the poor and vulnerable sections of the society. According to The Express Tribune, the declining GDP growth and other damages to the economy will further exacerbate the poverty situation in the country, leaving about 9-12 million more people in poverty. Pakistan, on the other hand, is a victim of global warming, although its contribution is less than 1 percent. The country is expected to get major support from developed countries during the upcoming UN Climate Change Conference, COP27, to be held in Egypt in November.
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