We're looking at 0% GDP growth and 25% inflation

Source: The News

Date: August 23, 2010

ISLAMABAD: According to a highly dismal, but realistic assessment made by the Ministry of Finance, Pakistan’s economy is faced with 0% GDP growth and a galloping inflation of 25% in the financial year 2010-11, it was learnt.

 Prior to the floods devastation, a GDP growth target of 4.5% had been fixed while inflation was to be brought down to 9.5% from the current inflation rate of 12.3%. The report states that the wiping out of the 4.5% GDP growth target translates into a Rs751.5 billion loss to the economy.
An official document, prepared by Economic Advisor’s Wing of Ministry of Finance under supervision of Principal Economic Advisor Sakib Sherani to assess the adverse impact of the ravaging floods, was also presented to top economic wizards led by Minister for Finance Dr Abdul Hafeez Sheikh. The report (a copy of which is exclusively available with The News) reveals that the initial first estimate (based on sketchy information to date from the field) on the impact of economic growth in 2010-11 suggests that overall GDP growth could be zero percent in real terms, i.e. a deviation of negative (-4.5%) from the target.

The summary titled “Pakistan Floods 2010: A Preliminary Look at the Macroeconomic Impact” states that the unprecedented scale and magnitude of the devastation caused by the floods is going to leave a very substantial imprint on the economic landscape in the short as well as medium-term.
As the crisis is still continuing, the official document states, assessments are very preliminary and hence subject to further revision. “However, it is clear that the ongoing natural calamity will have a “full spectrum” effect on macroeconomic environment, impacting economic growth, inflation, the fiscal position, balance of payment, employment, incomes and livelihood, and poverty”.

View the link: http://www.thenews.com.pk/23-08-2010/National/673.htm