Steve Davies, Senior Research Fellow, IFPRI Pakistan Water Week October 25, 2022

1. Selected Economic Effects of the 2022
Pakistan floods
A presentation for Pakistan Water Week, October 25, 2022
By Steve Davies, IFPRI
Senior Research Fellow

2. www.cgiar.org
Introduction
The floods in Pakistan this summer have had well known and
devastating effects:
• The total economic damages appears to be approaching $40
billion equivalent to more than 10 percent of Pakistan's 2021 GDP
• Crop and livestock losses are extensive: ICIMOD estimated that
losses might be $543 million for rice $485 million for cotton and
$273 million for sugarcane just in Sindh!
The immediate needs are for food, clean water, shelter and basic
health services, which were provided both in kind and through a
cash transfer program

3. Dimensions of Economic Effects
Want to examine the broader effects, from selected perspectives:
• Market and Productivity effects
• What’s happened to prices, trade and production in various
locations
• Distributional effects
• By sector and households
• Public policy challenges and potentials
• What should government do next

4. Nominal Price Changes of Selected Commodities
Sept 2021 to Sept 2022
Commodity % change Sept 21 – Sept
22
Commodity % change Sept 21 – Sept
22
Tomatoes 113.0 Basmati rice 30.5
Long Cloth 15.1 Sugar -13.0
Shirting 21.0 Onions 170.0
Milk 29.0 Petrol 62.8
Irri Rice 36.6 Mutton 25.9

5. www.cgiar.org
SPA Effects of PKR 1.0 Billion to Construction
0
20
40
60
80
100
120
140
160
180 15.1
15.2
15.3
15.4
15.5
15.6
15.7
15.8
15.9
15.10
15.11
15.12
16.1
16.2
16.3
16.4
16.5
16.6
16.7
16.8
16.9
16.10
16.11
16.12
17.1
17.2
17.3
17.4
17.5
17.6
17.7
17.8
17.9
17.10
17.11
17.12
18.1
18.2
18.3
18.4
18.5
18.6
18.7
18.8
18.9
18.10
PRK/$
and
City
CPI
Year and Month
City CPI* and $/Rupee Exchange Rate
PKR to USD CPI

6. www.cgiar.org
Real Price changes Oct 2016-Oct 2018
dfsdfs KPK Punjab Sindh
Rural Urban Rural Urban Rural Urban
Starchy Staples 9.3% 8.1% 6.2% 4.6% 15.0% 12.3%
Vegetables -23.4% -30.6% -23.2% -24.1% -25.2% -20.1%
Fruits -13.7% -11.7% 5.9% -15.1% -11.8% -2.9%
Dairy Foods 2.3% 9.1% -1.4% 0.5% 17.6% 12.5%
Protein Foods 12.1% 11.3% 11.0% 12.3% 11.3% 13.4%
Oils & Fats 17.4% 12.9% 18.4% 15.7% 15.5% 12.0%
Discretionary Foods 19.8% 30.7% 24.2% 33.4% 18.0% 16.2%

7. District-Wise
Crop Area
Affected by Floods

8. District-Wise
Incidence of
Poverty
Source: GoP, OPHI and UNDP:
Multidimensional Poverty in Pakistan

9. www.cgiar.org
Economic Effects of RS 200 billion Loss in selected Commodities
Effects of RS 200 billion Loss in :
Affected Commodity rice cotton sugar livestock F&V
Crops etc. -5.0 -3.1 -2.7 -23.4 -3.9
Textiles -7.3 -4.9 -3.8 -2.9 -10.4
Fert -31.9 -17.4 -15.1 -3.8 -17.2
Manu -5.1 -3.8 -2.4 -2.3 -4.0
Services -89.5 -76.6 -49.3 -46.5 -73.3
Farm Labor -14.4 -40.2 -16.1 -24.5 -20.5
Other Labor -15.8 -18.5 -9.6 -12.8 -15.4
Subtotal -169.1 -164.5 -99.0 -116.2 -144.7
Own Effect -175.8 -166.6 -219.0 -177 -178.9
Total -344.9 -331.1 -318.0 -293.2 -323.6

10. www.cgiar.org
Compensating for Losses
Affected
Commodity Infrastructure Combo
Crops etc. 6.6 10.0
Textiles 9.5 6.5
Fert 5.0 16.2
Manu 26.0 3.5
Services 80.4 65.6
Farm Labor 0.6 29.0
Other Labor 27.9 15.6
Subtotal 156.1 146.6
Own Effect 223.0 177.2
Total 379.1 323.8
One set of estimates of losses from ICIMOD had
them pegged at:
Rice Rs. 124 billion
Cotton Rs. 110 billion
Sugarcanes Rs. 62 billion
Livestock and other: Rs. 91 billion
These lead to losses of about Rs. 600 billion
with indirect effects
Would need an infrastructure program of Rs
350 billion to compensate for losses

11. www.cgiar.org
Conclusions
Price changes are likely affected by the value of the Rupee rising real
international prices, especially for petroleum, and specific situations
for different commodities rather than
The location specific damages suggest significant distributional
effects as the floods had the biggest impacts in poor districts
In designing the interventions, indirect impacts should be
accounted for