More than 33 million people have been affected and one-third of the country is under water. Swathes of land where crops once stood have been washed away and livestock has drowned. Communities have been washed away and there is a massive humanitarian crisis.
While the international community and Pakistanis, local and overseas, have pledged and donated funds for the victims as well as rehabilitation, what is the economic hit to the country?
As per the government and various ministries, the damage to agriculture has been substantial:
- Finance Minister Miftah Ismail has stated that the economic loss comes to at least $10bn.
- The Finance ministry estimates huge losses especially in cotton which is a big part (estimated to be more than 60%) of Pakistani exports.
- The Minister for Planning and Development Ahsan Iqbal estimates that 45% of the cotton crop is completely gone. The wheat crop (which was in an early stage), various vegetables and the rice crop have all been affected.
In a report by Arif Habib, ‘Floods 2022 – Inundated with Economic Woes’, it was observed that:
- This year’s rain was “three times higher than the national 30-year-average of 135 mm.”
- Pakistan had suffered Rs1.2 trillion ($5.3 billion) in economic losses which is about 1.48% of the gross domestic product (GDP).
- Consequently, GDP growth is expected to shrink to 2.49% (fiscal year 2022-23).
- With massive losses in agriculture, there is going to be a shortage in exports of textile, rice and sugar; this means imports will increase causing current account deficit to grow by $1.98 billion.
- Inflation to settling at 19.7% in the financial year 2023.
Abid Qaiyum Suleri, the executive director at the Islamabad-based Sustainable Development Policy Institute observed that:
- Economic losses were in multiple areas including infrastructure, livestock, livelihood, standing crops including cotton and rice in Sindh, disruption of the supply chain of vegetables and fruits.
- There was also a concern that precious resources for development projects would now be diverted to provide relief from flood victims.