Pakistan’s economy managed to grow by 2.4 percent in fiscal year 2010-11 (FY11), despite devastating floods in the early part of FY11, says the State Bank’s Annual Report on the State of the Economy released here on Monday.
It said that one-fifth of the country’s agricultural heartland was inundated, which interrupted production processes and disrupted the subsequent supply of both labor and capital. It is estimated that 6.6 million of Pakistan’s labor force was out of work for 2 to 3 months, and capital stock worth US$ 2.6 billion (1.2 percent of GDP) was lost, the Report added.
The SBP report said that while the international response to the devastation was below expectations, it is commendable that the government was able to address these challenges despite severe fiscal constraints.
Furthermore, the inherent resilience of the agriculture sector allowed it to post a bumper wheat crop in the rabi season and sizable production of minor crops (potato, onion, pulses, etc.), which spearheaded the revival, the Report said, adding that a spontaneous community effort towards rehabilitation and government support in the form of cash payments to flood affectees and providing free seeds and fertilizers, allowed the country to overcome this natural disaster.
