Monsoon flashfloods inundate ailing economy

“Historical trend reveals that agricultural loss due to floods makes about 50 percent of total loss to the economy,” said Zeeshan Afzal, an analyst at Topline Research.

He said the Met Office had predicted above average rains during September which carries a potential to augment losses and worsen the situation.

This time, monsoon in Pakistan started with heavy rains in northern KPK and AJK but the continuous downpours resulted into flashflooding in downstream Punjab, Sindh and Balochistan provinces, and triggered riverine floods. Torrential rains in Sindh in August also aggravated the situation.

“We are still in the middle of the situation and as per NDMA, these floods has affected approx. 1.4mn people and 0.83mn acres of crop,” said Afzal. Comparing the torrential rains in 2012, which led to flash floods in hilly areas and then Punjab, Sindh and Balochistan. The calamity affected about 4.8mn people and 1.2mn acres crops. Similarly in 2011, monsoon rains triggered floods in mid-August which affected 9.6mn lives and 1.9mn acres of crop area. However, 2010 floods were the worst in Pakistan’s history that affected 20mn people and 2mn acres crop area.

As intensity of recent floods is much less than 2010 level, it is much comparable with 2011 and 2012 floods in which Pakistan’s economy suffered Rs325bn and Rs251bn, respectively. “Agriculture sector is expected to bear the maximum hit due to recent floods, however, transportation and industries are not exempted either,” said the analyst.

As the flood has partially/fully ruined 1.05mn acres cropped area, achieving annual crop targets of cotton, rice, maize and sugar cane may become hard this year. Recently, CCAC (Cotton Crop Assessment Committee) has revised down cotton crop target for FY14 to 12.65mn bales from previous target of 13.3mn bales.

Further, manufacturing facilities are likely to remain under some pressure in flood-affected areas especially upper Punjab and northern areas. Further, industry off takes, especially cement and fertilisers, has also declined due to damages to transportation system while construction activities have slowed down due to rains/flooding.