Pakistan's financial woes to worsen after devastating floods

The unprecedented floods in Pakistan are estimated to have caused losses worth USD 18 billion and aggravated macroeconomic fundamentals despite a resumption of the IMF deal, according to Financial Post.

In the face of a dollar liquidity crunch, the demand for imports has gone up manifold. Over and above these challenges, the exchange rate has gone under immense pressure whereby the rupee nosedived 9 per cent against the US dollar.

The poor performance of the agriculture sector will put pressure on increased demand for commodities imports, the Post said. Without improving dollar infusions, Pakistan's macroeconomic vulnerabilities are not going anywhere, the report adds.

Last week, Pakistan Finance Minister Miftah Ismail admitted that the economic pressure has increased due to floods. "Difficult decisions have been taken to save the country from bankruptcy. The economic pressure has increased owing to recent floods," the minister was quoted as saying by Dawn during his meeting with Punjab Governor Balighur Rehman.

The federal minister further said efforts were being made to improve the situation. Ismail said Pakistan's economy was now heading in the right direction because of the prudent policies of the government.

This comment comes as UN relief agencies on Tuesday said millions of people in Pakistan are still deeply affected by catastrophic flooding which "is not going anywhere".

Close to eight million people have been displaced by the disaster and the UN along with the authorities and partners have continued to race to reach affected populations with desperately needed relief items.

Southern Sindh province is still in crisis, with many areas still under water. To date, more than 1,500 people have been killed, including 552 children.

"We don't have enough food, we don't have shelter, and still even the kind of healthcare that is required is not available," said Gerida Birukila, UN Children's Fund (UNICEF) Pakistan Chief of Field Office in Balochistan, another of the worst-hit provinces.

Echoing the deep concern among first responders, the UN refugee agency, UNHCR, noted that 7.6 million people in Pakistan have been displaced by the floods, with nearly 600,000 living in relief sites.

"Many parts of the country, especially in the southern province of Sindh, remain underwater, as well as ... parts of eastern Balochistan," said UNHCR spokesperson Babar Baloch, adding that officials have warned that it could take "up to six months for floodwaters to recede" in the hardest-hit areas.

(ANI)

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