Pakistan’s economic growth will plunge 2% because of the floods and lead to “massive” job losses, the prime minister warned today.
Yousuf Raza Gilani said one-fifth of the country’s irrigation infrastructure, livestock and crops had been destroyed.
“Performance of agriculture consequently will be much lower this year and the year ahead. This loss will have a snowball effect on manufacturing, services and export sectors,” he said. “Food security of the country is also under threat.”
The floods began over a month ago in the north-west after extremely heavy monsoon rains and surged south along the Indus River and its tributaries. The army, along with international aid agencies, are struggling to reach the eight million people who are still in need of emergency assistance.
The scale of the disaster has raised concerns about the stability of the country, which was already struggling with an anaemic economy and relentless attacks by the Taliban and al Qaida. Mr Gilani warned the floods may yet have “social implications,” but did not elaborate.
He said economic growth would drop to 2.5% in the 2011 financial year, down from a predicted 4.5% this year. Inflation, currently predicted to hit 9.5% next year, would likely be in the range of 15% to 20%.
“This economic loss will translate into massive job losses,” he said.
The floods have receded in parts of north and central Pakistan but are continuing in the south. The waters are expected to remain for several weeks, prolonging the misery of millions desperate to return home and rebuild their lives.
Foreign countries have pledged hundreds of millions of dollars to help Pakistan respond to the floods.
Even the country’s archenemy, India, has offered assistance and announced yesterday that it was increasing its aid from $5m to $25m.