Source: Dawn
Date: 11 Aug, 2010
KARACHI, Aug 10: Catastrophic floods mean that Pakistan will miss the 4.5 per cent gross domestic product (GDP) growth target this year though it is not yet clear by how much, a finance ministry official said on Tuesday.
The International Monetary Fund (IMF) said on Monday the floods, the worst in 80 years, will cause major economic harm as donor and investor concerns grow over the disaster’s impact on an already fragile economy.
“It is too early to say the extent of damage and loss of crops. But yes, it is a major catastrophe and it will have a negative impact on economic growth,” said Finance Ministry spokesman Asif Bajwa.
The government said it was assessing the damage but it would be substantial, especially in the agriculture sector which accounts for more than 21 per cent of GDP and employs 45 per cent of the labour force.
An economic growth target of 4.5 per cent in the 2010/11 (July-June) fiscal year would have to be revised downwards once the extent of the damage was known, he said. Growth was 4.1 per cent last year.
Pakistan and IMF officials are due to meet on Aug 23 to discuss a sixth tranche of the loan and Mr Bajwa said the IMF could provide more fiscal space in light of the floods.—Reuters
Amin Ahmed adds from Islamabad: The floods in Khyber Pakhtunkhwa, Punjab and Sindh have extensively damaged the rice and cotton crops.
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