The gushing waters hit Pakistan in July 2010 causing damages of about $43 billion. The areas that were affected by this unprecedented flood were Khyber Pakhtunkhwa, Punjab, Sindh, Balochistan and Gilgit-Baltistan. Over two thousand people have died and over a million homes have been destroyed since the flood began and more than 21 million people are injured or homeless. The flash floods in several parts have already damaged country’s economy and will leave marks on the country’s agriculture and economic growth. According to the early estimates more than 20 million people including 9 million children are directly suffering. This figure does not include those that are now indirectly bearing the burden. This is in all counts is the largest ever water splash in the 64 years history of Pakistan.
The post flooded affect on the economy of Pakistan is horrible because floods have not only killed people and animals, but also destroyed whole villages, infrastructure and ruined food crops. The country’s economy is badly impacted by the flood because infrastructure and crops have collapsed.
It may be mentioned that floods cause losses both to the GDP and to the capital stock and thus hinder the growth potential of the country. Moreover, these losses also have long‐term impacts on the macroeconomy. In addition, there will be enormous social losses due to this flood, the impact of which on the macroeconomy is much more than micro‐economic losses in terms of accelerating the growth potential of the economy. However, as yet there is no comprehensive source that provides information/analysis of possible macro‐economic impact of current flood losses.
More than 5.3 million jobs have been lost due to the floods. The loss of crops will hit the textile manufacturing which is the largest export sector of Pakistan. Nationwide car sales are predicted to fall as much as 25%. The milk supplies have also fallen by 15%, which will cause the retail price of milk to increase by Pk Rs 4 (5...