Pakistan's economy continues to struggle amid floods and falling currency
Pakistan floods
The Pakistani economy has been going through a tough time with the currency hitting an all-time low on Wednesday. The Pakistani Rupee is currently valued at Rs 240 against the US dollar – the worst performing currency in the emerging markets in the aftermath of the devastation caused by the floods.
The currency has been losing value consistently for the past two weeks and even the loan tranche of USD 1.16 billion from the International Monetary Fund (IMF) has not improved the situation.
The floods, which claimed more than 1500 lives, were also extremely catastrophic to the economy of the country. The rehabilitation process – both concerning the citizens as well as infrastructure – has added to the heavy debt burden and the floods also caused damages worth billions of dollars.
Following the floods, Pakistan also experienced massive inflation with food prices skyrocketing all around the country. In August, Finance Minister Miftah Ismail told Reuters that the prices of onion have grown almost five times due to the floods and the same was true for a number of food items.
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The other reason behind the rising prices is the number of crops which were destroyed in the natural disaster. The DW reported the country’s trade deficit is likely to go up to 3.5 per cent of its Gross Domestic Product (GDP) and it will be importing more tomatoes, rice, wheat, cotton and other items.
There have been a lot of foreign aid from various sources including the IMF in the aftermath of the disaster but even that will not be enough for the country to mount a comeback from the ongoing crisis as they will need $33.5 billion in the year through June 2023 to maintain their imports.