Flood-ravaged country in Pakistan released data on declining economy Inflation rate will be high Lowest GDP

Floods in Pakistan: The rains and floods have caused huge destruction in Pakistan, due to which there has been a lot of economic damage to the Pakistani economy. According to preliminary estimates, the devastating floods have devastated Pakistan, causing economic losses of over US$40 billion. The new data on economic damage exceeds the $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 $40 billion figure was presented at a meeting of the National Flood Response Coordination Center (NFRCC) of the Flood Response Center on Monday, where the Ministry of Finance “flagged Pakistan’s loss “. An assessment report titled “A Preliminary Assessment of the Impact of Floods on the Economy” was presented. The Ministry of Finance’s preliminary assessment report showed the economic loss to be around $18 billion.

Planning Minister said – will compensate by taking loan from banks

Planning Minister and NFRCC Chairman Ahsan Iqbal said: “The devastating flood conditions suggest that the extent of flood damage ranges from $30 billion to over $40 billion. We are in the process of doing a full flood assessment. Huh.” Flood damage will be compensated with the help of the World Bank, Asian Development Bank, provincial and federal governments.

The planning minister said the finance ministry had submitted a preliminary flood damage assessment, which was based on the analysis done at the moment, but the outcome of the model would depend on the inputs provided to it. “The NFRCC has ordered the Ministry of Finance to suspend publication of its flood impact report,” it said.

NFRC said – we will wait for the evaluation report

“We will await the outcome of the full assessment, but the damage is enormous and exceeds the 30 billion dollars recommended by the UN Secretary General,” the NFRCC chairman said.

According to the government’s estimate, Pakistan’s GDP is also down for the financial year 2022-2023 and it is expected to drop by 3-5%. Before the floods, the Ministry of Finance had set a target of 5% economic growth. The IMF will consider any waivers to Pakistan’s $6.5 billion bailout package solely on the basis of a credible assessment of flood damage.

GDP could fall drastically

The government has said that if the deficit widens to $40 billion, it means GDP growth this year could be negative and inflation could top 30% due to a complete supply chain breakdown. . According to an official from the Ministry of Finance, the preliminary assessment report showed that the overall loss of GDP growth due to the floods would be between 3.3% and 3.7%. But if the deficit is revised to $40 billion, then the economy will contract.

according to sources. The interim report showed that about 20% of the Public Sector Development Program (PSDP), or Rs. underspending.

In the interim report, the Ministry of Finance reduced the negative impact on the trade deficit due to the floods to 2 billion dollars against 4 billion initially. It did not provide any additional impact on the current account deficit, compared to earlier figures of $5 billion versus $4 billion.

The Ministry of Finance said that poverty will increase more difficult

The Ministry of Finance report indicates that the devastating floods have negatively affected the poor and vulnerable sections of society. According to The Express Tribune, the decline in GDP growth and other damage to the economy will further worsen the poverty situation in the country, leaving an estimated 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%. The country is expected to gain strong support from developed countries at the upcoming United Nations Climate Change Conference, COP27, to be held in Egypt in November.

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Ramon J. Espinoza