An Early Assessment of Flood Impact on Pakistan’s Economy
A recent report by The Washington Post has called the recent øoods in Pakistan, “Apocalyptic” “Unprecedented” “A monsoon on steroids”.
The scenes of destruction caused by the merciless øow of hundreds of thousands of cusecs of øood water carrying debris, wood and stone are unparallel to what the countr y has ever witnessed or experienced. Estimates suggest that the affected regions got 190% more rainfall
than usual. This exceptional spell of rains started in early part of June 2022 post a historic heat wave and little precipitation. The floods have displaced millions, wiped out complete establishments and destroyed any and all forms of infrastructure. The satellite imagery speak
more than what any words can explain: a reasonably well developed town
converted to empty hard blocks of river mud within a span of few weeks.
Major crops (Cotton, Rice, Maize, and Sugarcane) are largely affected by the flood, their loss is expected to remain 24.6 – 31.0 percent while the loss in other crops is expected to remain 3.0– 3.3 percent. Loss in livestock is expected to remain 1.9 – 2.1 percent. Thus, loss in the growthof agriculture sector will be 6.6 – 8.0 percent and its growth may remain negative (2.7-4.1) percent.
Due to backward linkages of the industrial sector with agriculture, loss in the growth ofindustrial sector will be 3.3 – 3.5 percent. Its growth for FY 2023 is expected to be 2.4 – 2.6 percent.
The services sector has linkages with the commodity-producing sector (agriculture and industrial), so loss in the growth of services sector will be 2.0 – 2.3 percent. Its growth for FY 2023 is expected to remain 2.8 – 3.0 percent.
Overall loss in the growth of GDP will be 3.3 – 3.8 percent. Thus, GDP growth for FY 2023 is expected to remain 1.2 – 1.7 percent. The level of unemployed workers could increase by almost 1.0 to 2.0 million in FY 2023.
