Pakistan Reports Rs371 Billion Flood Losses, GDP Growth Cut to 3.9%

Pakistan has informed the International Monetary Fund (IMF) that recent floods have caused economic losses estimated at Rs371 billion. The floods severely damaged infrastructure, agriculture, and public services across the country.

Originally, the government had set a target for real GDP growth of 4.2% for the current fiscal year, but due to the flood impact, this forecast has been lowered to 3.9%.

The floods resulted in over 1,000 deaths and more than 1,000 injuries. Nearly 12,569 houses were damaged along with thousands of kilometers of roads, hundreds of bridges, and extensive water infrastructure. Educational institutions, health facilities, public buildings, shops, and livestock were also heavily affected.

The worst damage to homes was seen in Balochistan and Khyber Pakhtunkhwa, while other regions including Punjab, Sindh, Azad Jammu & Kashmir, Gilgit-Baltistan, and Islamabad also experienced significant losses.

Agriculture was hit hard, with cotton production expected to fall from 10.2 million bales to around 8 to 8.7 million bales. Sugarcane and maize production are also expected to decline significantly.

The overall agricultural sector growth, initially projected at 4.5%, is now forecast to slow to 4%. Other sectors were affected as well, with industrial growth slightly reduced from 4.3% to 4.2%, and the electricity, gas, and water supply sector growth dropping from 3.5% to 2.9%. The services sector growth was also lowered from 4% to 3.7%.

The floods have contributed to losses across various sectors including electricity and water supply, housing, infrastructure, agriculture, industry, and services. These combined losses are expected to reduce Pakistan’s overall economic growth for the year.

On the financial front, Pakistan’s Ministry of Finance informed the IMF that the country needs $26 billion in external financing, with about $12 billion expected to be rolled over from previous debt.

China has promised support in refinancing within the agreed timeframe. Pakistan also plans to return to international bond markets, potentially issuing a Eurobond in the last quarter of the fiscal year, depending on global interest rates and credit rating improvements.

In the meantime, a Panda bond is scheduled for November to raise between $250 and $300 million in the Chinese market, with a second tranche planned for April 2026. The State Bank of Pakistan has also purchased over $7.7 billion from the interbank market recently to build foreign exchange reserves.