KARACHI: As of 2019, Karachi had an estimated nominal Gross Domestic Output (GDP) of $164 billion which makes the city’s daily GDP approximately $449 million. As a result of the disastrous rain in Karachi, the economic hub of Pakistan, commercial activities were at a standstill on Friday with the Sindh Government declaring a public holiday.
On Thursday, businesses were forced to close sooner as roads were flooded with water and electricity supply remained unreliable. Later on in the evening, the K-Electric decided to turn off power for a significant majority of Karachi as a preventative measure. Some areas are yet to have their electricity restored.
The Pakistan Stock Exchange (PSX) building also saw water accumulate in its premises.
Considering the deadly impact of the rain and the difficulty commuting to work, the Sindh Government announced Friday as a public holiday. As a result of this, it is expected that the rain has cost Karachi an upwards of $449 million in a day, especially including the size of the informal economy.
Moreover, this does not include the inventory loss that businesses have incurred. Speaking to Profit, a furniture showroom owner at Nursery Shahrah-e-Faisal disclosed that inventory worth more than Rs 1 million had been destroyed by water entering into his shop alone. He also adds that it is now difficult for him to meet pre-ordered furniture.
Similarly, a factory owner in North Karachi Industrial Area, one of the twelve industrial areas in Karachi, commented that due to water accumulation on the streets and eventually reaching indoors, his machinery has been damaged. He adds that he does not know when he can begin operations again because his priority now lies with the safety of his staff.
Profit reached out to the Public Relations teams at various banks. Contact could not be established. However, informal sources state that it is difficult to determine how many banks were operational today and how many ATMs are running. This is based on the fact that not only are signals and internet connectivity disturbed in Karachi, but also due to the fact that a number of individuals are stranded in their homes, at work, or until yesterday on roads.
Business owners have been complaining about how the infrastructural weaknesses in Karachi have resulted in greater difficulty to run a business.
While there remains uncertainty regarding the accurate cost of the city shutting down after experiencing strong rain and urban flooding, what is certain is that the situation results in a loss to the national GDP. There is another spell of rain expected this week, which may result in more days of commercial activity at a standstill.