Business

Floods slide down Pakistani economy till 2023 : Asian Bank forecasts

Asian Development Bank December 2022 outlook released
ADB predicts Pakistani economy down in 2023

The Asian Development Bank terms Pakistani outlook for FY2023 (ending 30 june 2023) has deteriorated under heavy flooding that began in mid-june.

The ADB commented Pakistani economy was already struggling to regain macroeconomic and fiscal stability before the floods, which have adversely affected cotton, rice, and other important crops as wheat is usually planted from mid-october, flood damage threatens the upcoming agricultural season as well.

The flooding is expected to have spillover effects on industry, notably textiles and food processing, and on services, in particular wholesale trade and transportation. The flood disruption and damage are expected to slow real gdp growth in combination with a tight monetary stance, high inflation, and an unconducive global environment.

In Pakistan, floods that began in mid-June have dampened economic activity already affected by stabilization efforts to tackle sizable fiscal and external imbalances and doubledigit inflation.

The fiscal year 2023 forecast for Pakistan has been revised to reflect a “weaker currency [and] higher domestic energy prices” along with “flood-related crop and livestock losses and supply disruption, which have caused transitory food shortages and price spikes”, ADB elaborated in the report.

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