Economic loss from floods in Pakistan reaches $18b


Men wade through flooded roads in Sindh – Reuters
  • Economic losses have increased further, Center says.
  • The increase is mainly due to the fact that agricultural crops have been destroyed.
  • A new estimate indicates that 8.25 million acres of crops were destroyed.

The cost of rapid assessment of projected economic losses from floods as calculated by the Center and approved by the provinces has increased further to $17-18 billion.

The economic losses increased further mainly because agricultural crops were destroyed on 8.25 million acres compared to an initial assessment of 4.2 million acres. Cotton, rice and minor crops have been badly damaged and if the dewatering is not carried out properly, it can cause serious problems for the sowing of wheat.

The cotton harvest has evaporated in most parts of the country and now the wheat plantings are threatened.

The Ministry of National Food Security was tasked with drawing up a synthesis to increase the minimum support price of wheat for the coming harvest. The authorities held meetings with international donors and assured them that Pakistan would put in place an effective monitoring and evaluation system to use every penny to mitigate flood losses in a transparent manner.

“The UN Secretary General is due to make a three-day visit on Friday (today) and Islamabad will share the cost of the rapid assessment with him. International donors under the supervision of the World Bank are doing their separate damage and needs assessment study and then these figures will be reconciled,” official sources told The News on Thursday.

The Ministry of Planning is undertaking an exercise aimed at reducing Public Sector Development Program (PSDP) from Rs250 to Rs300 billion to reduce it from Rs800 billion to Rs500 to Rs550 billion for the current financial year. These resources will be diverted to flooded areas.

When contacted, Minister of State for Finance Aisha Ghaus Pasha and inquired about the latest rapid assessment cost, she declined to share the exact information and said the cost had increased and efforts were underway to finalize it by giving a deadline.

As part of the rapid assessment exercise, the government had originally estimated the cost of economic losses at $10 billion to $12.5 billion, but revised estimates suggested the cumulative cost of economic losses had climbed to as high as $10 billion to $12.5 billion. at 17 to 18 billion dollars.

Per capita income is expected to slow in the wake of reduced GDP growth. The government had envisaged a GDP growth rate of 5% for the current fiscal year. The IMF had recently forecast that GDP growth would be 3.5% for the current fiscal year. However, the floods have damaged the agricultural sector and the industrial sector has also given an indication of slowdown, so GDP growth could be below 2%.

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