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Long-term effects of deadly floods on Pakistan’s economy are food insecurity and economic losses

Over 1,100 people have been killed and over 33 million people have been affected by flash floods in Pakistan since mid-June, all due to unprecedented monsoon rains that have washed away roads, crops, infrastructure, and bridges.

Since agriculture accounts for a large portion of Pakistan’s GDP, the country’s central bank had already warned of the high rainfall’s potential impact on the country’s economic production.

Damage from the floods could be more than $10 billion, according to an early and tentative estimate by government officials.

The hardest hit areas by the floods so far have been in the south, southwest, and north. Countless acres of fields and harvested crops were lost.

Minister for Planning and Development in Pakistan Ahsan Iqbal recently told Reuters that early wheat sowing in southern Pakistan has been impacted by the flooding and that 45 percent of the cotton crops had been destroyed. In addition, several areas used for growing food, such as rice farms and agricultural land, have been submerged.

According to the data from the finance ministry, seasonal crops are extremely important to the economy, especially cotton, which accounts for more than 60% of exports.

According to research by Arif Habib Limited of Karachi titled “Floods 2022 – Inundated with Economic Woes,” this season has seen the highest rainfall total in Pakistan since 2010, at over 390 millimeters. Moreover, this is “three times higher than the national 30-year-average of 135 mm,” the report states.

The article goes on to say that the aftermath of the disaster will be felt for 30-45 days, while recovery will take much longer. Economic losses are estimated at around Rs1.2 trillion ($5.3 billion), or around 1.48 percent of GDP.

With a base case assumption of 2.97%, Arif Habib Limited now predicts GDP growth of just 2.49 percent for the fiscal year 2022/23. A recovery to 4.4% of GDP growth is projected for the following year.

Inflation is expected to rise to 19.7% by the end of the fiscal year 2023, and the government predicts that the current account deficit would increase by $1.98 billion due to the import of food commodities and the decline in exports of textiles, rice, and sugar due to the shortage in the country.

The cement, steel, automobile, oil marketing company, and fertilizer industries are also predicted to have short-term demand increases. On the other hand, it’s expected that most of these industries will improve after the restoration is finished.

Economists and policy analysts As if that wasn’t bad enough, a spokesperson for Geo. tv said that the floods might have a terrible effect on a country already struggling with high inflation, a sinking currency, and a current account deficit.

Mahnur Mehfooz
Written By

Mahnur is MS(development Studies)Student at NUST University, completed BS Hons in Eng Literature. Content Writer, Policy analyst, Climate Change specialist, Teacher, HR Recruiter.

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