The unusual heavy monsoon rains and devastating flash floods are estimated to cost cash-strapped Pakistan's economy over USD 4 billion in the current fiscal year as the calamity has badly hurt agricultural activities in Sindh and Balochistan, according to a research report.
While it is early to assess the actual impact, Pakistan, where agriculture has a 23 per cent share in gross domestic product (GDP), can remain highly vulnerable in the aftermath of the floods that have killed nearly 1,000 people and injured and displaced thousands more since mid-June.
The monsoon season, which began in June, has lashed Pakistan with particularly heavy rains this year and rescuers have struggled to evacuate thousands of marooned people from flood-hit areas. The crisis has forced the government to declare a state of emergency in parts of the country.
The repercussions of flash floods may include higher imports, compromise on exports and rising inflation, which will undermine efforts of the government to tackle the macro headwinds, The Express Tribune newspaper reported.
"Based on our preliminary estimates, the current account deficit may increase by USD 4.4 billion (1 per cent of GDP) - assuming no counter-measures are taken, while around 30 per cent of the CPI (Consumer Price Index) basket is exposed to the threat of higher prices," the daily reported, citing a report by JS Global Research.