Asian Development Bank paints bleak picture of Pakistan's economy

By Aamir Latif

KARACHI, Pakistan (AA) – The Asian Development Bank (ADB) on Wednesday said that Pakistan’s economic outlook has deteriorated due to recent super floods amid indications of slow Gross Domestic Product (GDP) growth during the current fiscal year in combination with a tight monetary stance, high inflation, and an un-conducive global environment.

In its report titled "Asian Development Outlook 2022 Supplement," the ADB observed that the catastrophic floods that inundated a third of Pakistan in September this year have “dampened economic activity” in Pakistan, which was already affected by “stabilization efforts to tackle sizeable fiscal and external imbalances and double-digit inflation.”

The massive floods, the report said, have also threatened the upcoming agricultural season as well, as wheat is usually planted from mid-October.

The catastrophe is also likely to have "spillover" effects on the industry — mainly textiles, the country's prime export, and food processing — and on services, in particular wholesale trade and transportation.

Torrential rains and raging floods have adversely affected the key crops, including cotton and rice, across the country.

"The fiscal year 2023 forecast for Pakistan has been revised to reflect a weaker currency and higher domestic energy prices” along with “flood-related crop and livestock losses and supply disruption, which have caused transitory food shortages and price spikes,” the report maintained.

Torrential rains and devastating floods brought a third of Pakistan under water, aside from killing nearly 1,700 people, since mid-June.

Over 33 million people, mainly in the Sindh and Balochistan provinces, were affected by the biblical floods, with hundreds of thousands of houses, buildings, bridges, schools, and roads washed away.

A post-disaster needs assessment conducted by the government and development partners, including the Asian Development Bank, estimated that total damage and losses are at more than $30 billion, and recovery and reconstruction needs are at $16.3 billion.