Alliance of Pakistan Flood Relief Efforts for Sindh, Pakistan
Post flood impact on pakistan economy new
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ASAD WAZIR ALI
NAVEED KHAWAJA
ABDUL AHAD SIDDIQUI
RAVI KUMAR LASSI
AZHAR HUSSAIN
Presented To:Syed Qamar Ali Zaidi
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FLOOD AFFECTED AREAS North Western regions
faced heavy rainfall- KP, GB, AJK and Balochistan
A moving water body equal to the land mass of UK
One-fifth of the whole country was under water
Most damage- Sindh Irrigation structures
destroyed• Amandara Headworks• Munda Headworks
Flood Peaks• Nowshera Town• Chashma Barrage • Taunsa Barrage • Kotri Barrage
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Destruction of life and property According to NDMA
78 out of 124 districts were affected20 million people (10% Pakistan’s
Population)1600 deaths1.6 millions homes destroyedAround 3000 injured
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Pre-Floods Economic Scenario External Economic position was improving
significantly Current account deficit to 2% of GDP 2009/10 SBP Forex to US$ 13.1 Bn at the end of Jun
2010 GDP by 4.1% But inflation to 12-13% as fical defcit 5.1%
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Economic Impact Major Economic Damages from assets lost
One major Gas field 6 Power plants destroyed (power shortfall rose from
4500MW to 6000MW)
PEPCO claims losses of US$ 47M1000 villages in S.Punjab are without power where new
poles & wires are required
Private Sector Losseshousing, business premises, livestock, dairy farms, fish
farms, agriculture land and crops, furniture etc, etc.
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Total Damages = Direct + Indirect Losses
Direct Damage – monetary value of completely or partially destroyed assets
Indirect Losses – income losses & change of flow of goods & services & other economic flows
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Total Damage Costs by Sector
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Percentage Damage by Province/Area
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Estimate of Total Damage Costs by Sector
AGRICULTURE 50% of overall losses
is in this sector Amounts to Rs 429
Bn of loss 89% of this is
cropped agricultureExpected 3.5%Actual 10%
(major crops 7%)
(minor crops 20%)
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LIVESTOCK Heavy losses of Rs.
48 Bn Expected 3.5% Value added 0.6%
INDUSTRY Direct damage to infra
structure Indirectly affected Input losses- textile &
food preparing sector
Estimate of Total Damage Costs by Sector
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INFLATION Highest of 2.5 % was
in Sept’10 Reason
Flood damages to crops Heavy government
expenditures
State Bank RemediesRaising policy index rates
by 0.5% in July and Sept
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GDP 20% chunk of GDP is from Agriculture
alone, and 1.93 M acres of land is damaged
20% of cotton crop destroyed Before flood: budget deficiet – 4.5 % of
GDP, now it to 6-7% of GDP Credit rating is B3 (adequately captures
the risk) which is just above C rating (sovereign default of the country)
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GDP Graph (2007-2010)
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Balance of Payments The fiscal deficit was expected to from the 2%
of GDP 2009/10 Since the disaster, the conditions are expected
to worsen further 2 M bales of cotton is lost (loss for the textile
industry) Cement – will be used for reconstruction
therefore won’t be exported in imports of food, fuels, construction material
and machinery
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Conclusion Economic recovery is getting difficult
Persistent inflationFiscal slippagesPower sector issuesPrices of fuel & energyPost-flood supply chain of foodGovernment borrowings from SBPNarrow tax base tax to GDP ratio
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Conclusion (cont’d)
Cost to the economy is being paid through erosion in the purchasing power of the
rupeegrowing total debt
discouragement of productive private sector activity.
Regional Imbalances Affected areas were already
underdeveloped and economically weak
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Conclusion (cont’d)
Unemployment Loss of income (from crops and livestock)Loss of business assets
Poverty would drastically and will enter the urban areas as well
Inflation due to the shortage of food items and mobility of peoples in search of employment affects the entire country.
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