PAKISTAN FLOODS: IMF Reviews ‘Massive Challange’

A GRIM SITUATION

The International Monetary Fund says the floods that have struck Pakistan pose a “massive economic challenge” and it will review the country’s budget and financial prospects.

The IMF will start talks with Pakistani officials in Washington on Monday to assess how best to give help.

Tens of thousands more Pakistanis have been fleeing the floods, with the south now bearing the brunt.

Overall, about 1,600 people have been killed and 20 million affected.

Masood Ahmed, director of the Middle East and Central Asia department of the IMF, said in a statement: “The floods which have hit Pakistan in recent weeks and brought suffering to millions of people will also pose a massive economic challenge to the people and government of Pakistan.

“The scale of the tragedy means that the country’s budget and macroeconomic prospects, which are being supported by an IMF-financed programme, will also need to be reviewed.”

Mr Ahmed said that the IMF stood by Pakistan “at this difficult time”.

The IMF agreed a rescue package with Pakistan two years ago as the country was then weighed down by soaring inflation, shrinking reserves and fighting militancy.

The Pakistan government has said that the cost of rebuilding after the floods could be as high as $15bn.

Extensive damage to the agricultural industry as a whole is another heavy blow because this is such an important part of the economy.

Meanwhile, tens of thousands more Pakistanis are being displaced in the southern province of Sindh, which is now being described as the country’s worst hit province.

The UN says it has now raised about 70% of the $460m it called for in its emergency appeal, as donors pledged more money.

Pakistan has also accepted $5m in aid from its rival and neighbour India.