According to government estimates, Pakistan’s devastating floods have cost the country between $10 billion and $12.5 billion in economic losses in addition to the lives lost. For the current fiscal year, inflation is expected to increase by between 24 and 27%, possibly even reaching 30%.
The State Bank of Pakistan, FBR, PIDE, and other prominent organisations were represented on the high-profile committee that determined that unemployment and poverty have increased significantly, going from 21.9% to over 36%.Following the devastation caused by catastrophic flooding in 118 districts across the nation, 37% of the population now lives in poverty.
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 would be lowered from 5% to 2%. According to the State Bank of Pakistan, growth for the current fiscal year will be lowered from 4% to 4.5% to 2%, The News stated.
Following the floods, agriculture growth was severely impacted, 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.
On the eve of the budget for 2022–23, it is predicted that the country’s GDP growth will fall by 3% and hover around 2% of GDP rather than the earlier anticipated growth rate target 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 entire accumulated losses to agriculture and physical infrastructure, Google has also volunteered its services to the government.
The country’s most recent flood, which occurred in 2010, had damages in 78 districts, but the recent floods’ fury could be judged by the fact that it had affected 118 districts of those areas, which are important centres of economic activity.
When contacted, Minister of State for Finance Aisha Ghaus Pasha stated that although the government has prepared the most recent predictions, they will be shared with the pertinent parties prior to being made public.
She informed a gathering of reporters that the preliminary analysis was in progress and will be finalised shortly before being made public.
She stated that contributors would be informed of the evaluation of economic harm. She added that the government has also instructed the relevant authorities to develop a prediction of evaluation regarding a potential rise in non-performing loans (NPLs).
“For the current fiscal year, the government has set a 3.9% growth target for the agricultural sector. According to the preliminary analysis, agriculture’s growth would decline by 1.8% and account for 2% of the GDP. The GDP share of the services sector will decline by 2% and end the current fiscal year at 3.1%.
