Accessibility links

Breaking News

Pakistan's Economy Becomes Another Victim of Flood Disaster

Pakistani Prime Minister Yousuf Raza Gilani is warning the country's devastating floods will slow economic growth and lead to rising inflation and massive job losses.

In a speech to his Cabinet Wednesday, Mr. Gilani said economic growth would drop to 2.5 percent from the predicted 4.5 percent in the 2011 financial year.

The prime minister also said inflation would likely hit 15 to 20 percent next year.

More than a month of flooding triggered by monsoon rains has killed an estimated 1,600 people, affected nearly 20 million others, and submerged one-fifth of the country.

Mr. Gilani said the overall performance of Pakistan's agriculture sector will be much lower this year and next, affecting manufacturing, services and exports. He said this economic downturn will translate into massive job and income losses for thousands of families and may have what he called "serious social implications."

United Nations officials have warned of hunger, homelessness, and desperation among the millions of flood victims.

They say 8.6 million children have been affected, and are warning that without quick action, Pakistan is headed toward a second wave of deaths from waterborne illnesses.

U.N. officials say Pakistan has received more than $1 billion in international assistance and pledges, but need more.

The receding waters in the north have allowed some people to return to their homes, but flooding in the south is spreading to new areas.

On Wednesday, British Deputy Prime Minister Nick Clegg visited flood-stricken areas in southern Pakistan.

Some information for this report was provided by AP, AFP and Reuters.