Pakistan records the worst floods since 2010 with rainfall crossing 390mm this season, which is 3 times higher than the national 30-year average of 135mm. The estimated impact of loss to the economy is around PKR 1.2trn (1.48% of GDP). It is predicted that GDP growth will shrink to 2.49% in FY23 and the current account deficit to grow by USD 1.98bn. Inflation will increase up to 19.7% in FY23. More than 12,00 people have died and 15,75 are injured. The people who are living in rural areas has affected more than in urban areas because flooding has destroyed their assets and source of income also.
In the wake of the current crisis, the government has introduced a few cash transfers and social assistance programs such as Rs 37.2 billion flood relief cash programs to distribute Rs 50,000 in two cash instalments among 1.5 million people. Moreover, the government has announced flood relief assistance under the Benazir Income Support Programme (BISP) with a budget of Rs 70 million. The amount of assistance has increased by 2.5 times and each family will receive compensation of Rs 25,000 to help them recover from financial losses. This cash will help them to purchase any items to meet their specific needs like clothes, medicines etc. Cash assistance programmes will play a vital role in mitigating income shocks besides the issues of poverty and vulnerability. This program will strengthen the purchasing power of the poor.
Pakistan is among the low-income country and has a 21.5% level of poverty. The social assistance program will reduce poverty and increase the economic and social participation of the vulnerable. At this point, generating employment is difficult and social protection will provide support to the poor. Flooding in Pakistan is an eye opener for government to improve their insurance system and introduce an agricultural insurance program for farmers. Moreover, in the long term government can include residents as daily wage workers in the process of rehabilitation and rebuilding of their areas.
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