Floods to hit economic outlook

ISLAMABAD: The Ministry of Finance on Thursday said the flash floods might impact Pakistan’s economic outlook – becoming the third major force to slow down the economy – as the government planned to make an appeal for aid to the United Nations to deal with the devastating floods.
The recent floods, caused by abnormally heavy monsoon rains, have adversely affected important and minor crops, which may impact the economic outlook through agricultural performance, said the Ministry of Finance in its monthly economic outlook.
The floods have reduced the potential output of both main and minor Kharif crops, thereby tampering with positive outlook of the agriculture sector, stated the ministry.
Initially ignored by the government, the floods have become the third serious challenge after “the global and domestic uncertainties that are still surrounding the economic outlook”.The floods have negatively impacted economic activity in a number of cities, which may diminish economic prospects, stated the finance ministry. The ministry released the report the day Prime Minister Shehbaz Sharif met with the international donors and sought their help to deal with the aftermath of the floods, telling them that initial assessments showed that the damage was more than that caused by the 2010 floods. Besides damage to infrastructure and crops, around 1,000 people have so far died. Sources said it was unlikely that the international lenders would commit major funds at this stage due to the prevailing global situation and their commitments to Ukraine. The World Bank may repurpose its existing $370 million for the flood-related activities and the Asian Development Bank (ADB) is expected to reprioritise its $25 million funds, including an $8 million grant, earlier committed for Covid-19 purposes. -PNP