Cash-strapped Pakistan to seek flood aid from international lenders

Islamabad [Pakistan], September 3 : Pakistan is planning to reach out to global lenders for monetary assistance to deal with devastating floods in the country, local media reported on Saturday.
The Shehbaz Sharif government will seek help from the likes of the International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB) and others, ARY NEWS reported.
The global lenders will be conveyed a joint report of its disaster management authority, finance and planning and development ministries over losses during the floods, the report said citing sources privy to the matter.
"A report on initial losses has been prepared and it highlighted a loss of USD 10 billion to the economy owing to the devastating floods," the sources were quoted as saying by ARY.
Confirming the development, Pakistan State Finance Minister Aisha Ghous Pasha said that global lenders will be approached for the rehabilitation of flood-affected areas. "We will complete estimates of damages from floods in two days," she said.
Pakistan is struggling to deal with the devastating flood situation. Over 33 million people are estimated to have been affected by the floods with more than 1,000 deaths reported and about 1,500 injured.
More than 6.4 million people in Pakistan are in dire need of humanitarian aid as the Shehbaz Sharif government struggles to cope with the unprecedented situation.
The cash-strapped country is mulling another emergency loan days after it managed to secure the much-needed bailout package from IMF to avert an imminent default.
Estimates suggest that devastating floods in Pakistan might have caused nearly 2.5 trillion Pakistani rupees in losses, The Express Tribune newspaper reported. The initial assessment says the economic growth rate could slow down to just 2 per cent in the current fiscal year.
"Our team is also helping to assess the damage caused by floods to draw up plans to support longer-term rehabilitation efforts and strengthen communities' climate resilience," Asian Development Bank (ADB) Country Director for Pakistan Yong Ye said.
On Monday, IMF's Executive Board completed the combined seventh and eighth reviews of the Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan. The Board's decision allows for an immediate disbursement of SDR 894 million (about USD 1.1 billion), bringing total purchases for budget support under the arrangement to about USD 3.9 billion.
The IMF said that Pakistani authorities have taken important measures to address worsened fiscal and external positions resulting from accommodative policies in FY22 and spillovers from the war in Ukraine which have placed significant pressure on the rupee and foreign reserves.
Pakistan is at a challenging economic juncture. A difficult external environment combined with procyclical domestic policies fueled domestic demand to unsustainable levels. According to IMF, the resultant economic overheating led to large fiscal and external deficits in FY22, contributing to rising inflation and eroded reserve buffers.
IMF's Deputy Managing Director and Acting Chair Antoinette Sayeh said Pakistan's economy has been buffeted by adverse external conditions, due to spillovers from the war in Ukraine, and domestic challenges, including accommodative policies that resulted in uneven and unbalanced growth.