The monsoon season, which started in June, has hit Pakistan with particularly heavy rainfall this year, and rescuers have strived to clear…
The unexpected heavy rainfall and disastrous floods have been estimated to cost impoverished Pakistan’s economy over $4 billion in the latest fiscal year because the calamity has severely hit agricultural activities in Sindh and Balochistan.
Although it is too early to assess the true impact, Pakistan, where agriculture accounts for 23% of GDP, will remain largely vulnerable in the aftermath of floods that have killed about 1,000 people and injured and displaced thousands since mid-June.
The monsoon season, which started in June, has hit Pakistan with particularly heavy rainfall this year, and rescuers have strived to clear thousands of deserted people from flooded areas. The calamity has pushed the government to announce a state of emergency in parts of the nation.
According to the Express Tribune, the flood’s aftermath may include increased imports, settlements on exports, and rising inflation, undermining the government’s efforts to address the macroeconomic headwinds.
The daily reported, citing a report by JS Global Research, that “depending upon our initial estimates, the latest account deficit may rise by $4.4 billion, assuming no contrary measures are performed, whereas approximately 30 percent of the CPI basket is subjected to the danger of higher prices.”
Challenges that may be faced during calamity
The challenges may push the government to make extra imports of cotton worth $2.6 billion, wheat worth USD 900 million, and the nation will lose textile imports of approximately $1 billion. This amounted to approximately $4.5 billion in the latest the fiscal year 2022-23.
Due to the floods, consumers are assumed to confront a supply deficit of household groceries like onions, tomatoes, and chillies, the report said.
The worst-impacted crop is cotton. Farmers manufactured 8 million bales in the last fiscal year. However, now they will again have the worst crop similar to last year during heavy rainfall in Sindh. It said cotton sowing has been damaged to a great extent.
Cotton imports are required to meet 80 percent of the requirement this year. The import bill will probably exceed $4.4 billion in the fiscal year 2022-23.
Further, any shortages of imported raw cotton or other raw textiles will negatively affect the nation’s textile exports, the research house said.
