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IMF relief sought on flood losses | The Express Tribune
ISLAMABAD:
Pakistan on Wednesday informed the International Monetary Fund (IMF) that its economy suffered Rs744 billion in losses due to floods, with 60% of the damage occurring in the agriculture sector and again sought adjustment of these losses against the programme targets.
The preliminary damage assessment has been shared with the IMF, as Finance Minister Muhammad Aurangzeb confirmed that the review talks concluded with the global lender on Wednesday. The talks were aimed at securing two loan tranches totalling around $1.2 billion under separate loan programmes.
Aurangzeb said that the IMF had shared the Memorandum for Economic and Financial Policies (MEFP) and that the Staff-Level Agreement for completing the second review would be announced after further discussions. The MEFP is a set of policy documents agreed upon by both sides. “There has been a broader consensus with the IMF,” said the finance minister during an informal discussion outside the Q Block with journalists from two media outlets.
Sources said that towards the conclusion of the talks, discussions focused on adjusting the impact of the floods against the programme’s targets of primary budget surplus and provincial cash surplus. The finance ministry also briefed the prime minister in this regard, they added.
The IMF had set the primary budget surplus target at Rs3.1 trillion and had earlier indicated roughly Rs500 billion adjustments within the budget to offset the flood impact. Sources said that the finance ministry wanted the IMF to allow adjustments against the target to the extent of the actual damages.
According to preliminary findings shared with the IMF, the economy sustained Rs744 billion in losses. After adjusting these losses, the economic growth is now projected to remain at 3.5%, against the annual target of 4.2%. The revised growth projection is still about 1% higher than the World Bank’s recent projection of 2.6%, which also cited flood damage.
Of the Rs744 billion losses, Punjab bore Rs632 billion, according to initial assessments. Khyber-Pakhtunkhwa (K-P) reported Rs51.3 billion in losses, followed by Sindh with Rs32.2 billion, another Rs12.6 billion in K-P, and Rs6.8 billion in Balochistan.
Flooding in three rivers and flash rains in the country’s upper regions inundated large areas, forcing the evacuation of 6.5 million people.
The projected Rs744 billion losses are double the earlier Rs370 billion estimate shared with the IMF.
Details show the agriculture sector sustained Rs439 billion in losses, roughly 60% of the total. Almost all these were crop-related. As a result, agriculture growth is now projected at 3%, compared to the 4.5% target. Growth in the crops sub-sector is expected to fall below 1%, against the target of 5.4%. Crops on 3.3 million acres and 22,841 livestock were affected.
Roughly one-third of the cotton crop was destroyed, with output now projected at 7.2 million bales, a reduction of up to 3.4 million bales, as per preliminary estimates.
Authorities estimated that 12.6% of the rice crop was damaged, with expected production at 8.9 million tonnes, representing a loss of 600,000 to 1.2 million tonnes. Sugarcane production has been revised to 79 million tonnes, reflecting losses between 1.3 million and 3.3 million tonnes, or 4% of budget estimates. Maize production is projected to decline by 13%, with output capped at 9.2 million tonnes.
The industrial sector sustained Rs48 billion in losses, with its annual growth rate revised slightly down to 4.1%, according to the assessment.
The services sector is projected to have suffered the second-highest losses of Rs257 billion, reducing its growth forecast by 0.4% to 3.6%. Within services, the transport and storage subsector incurred the highest loss, Rs150 billion, cutting its growth rate almost by half to 1.9%. Real estate activities recorded Rs55 billion in losses, while wholesale and trade sectors lost Rs40 billion.
Preliminary assessments showed that 229,763 houses were damaged, 790 bridges destroyed, and 866 water infrastructure systems washed away. About 2,811 kilometres of roads were damaged.
In Punjab alone, 213,097 houses were damaged, followed by 6,370 in Balochistan, 3,332 in Sindh, 3,222 in K-P, 2,417 in Azad Kashmir, and 1,260 in Gilgit-Baltistan. In Punjab, 1,216 kilometres of roads and 462 bridges were destroyed, while 5,467 livestock perished.
A total of 1,037 deaths and 1,067 injuries were reported nationwide. The highest number of deaths, 509, occurred in K-P, followed by 322 in Punjab, 90 in Sindh, 38 each in Balochistan and Azad Jammu and Kashmir, 31 in Gilgit-Baltistan, and nine in Islamabad.
Floodwaters also affected eight mines and 1,297 commercial shops. About 2,267 educational institutions, 243 health facilities, and 129 public buildings were damaged. The floods disrupted normal life in 70 districts, affecting 6.5 million people, of whom four million were relocated to safer areas.
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Kevin PeacheyCost of living correspondent
Getty ImagesDebt charities say they are receiving an influx of calls as people worry their financial situation has slipped towards becoming unmanageable.
The first weeks of January are usually the busiest time of year for helplines following a particularly expensive period.
Advice charity StepChange said Monday was busier than any single day last year, and credit counselling service Money Wellness said a fifth of those accessing its services at the turn of the year did so between 22:00 and 03:00.
Dave Murphy is working his way out of debt and said demands from creditors could have become overwhelming, but he urged anyone struggling to ensure they asked for help – for their financial and mental wellbeing.
Money Wellness, which runs free debt and money advice services, said thousands of people had accessed its services on Christmas Eve and Christmas Day. Expanded assistance online allows people to increasingly find information outside of normal hours – including overnight.
Sebrina McCullough, its head of advice, said: “The numbers we’re seeing over Christmas and New Year are unprecedented.
“People often feel pressure to celebrate the holidays, even when money is tight, and our data shows many are turning to us late at night when they feel most anxious.”
Pressure of priority bills
StepChange’s website had 3,958 visitors on Christmas Day, and 15,401 on New Year’s Eve and 1 January combined.
Many may have simply been exploring their options, but calls came in thick and fast at the start of the month. While not at the level of the energy crisis of a few years ago, call numbers were notably up on last year.
The Money Advice Trust, which runs National Debtline, said the first working days of January had seen more calls than last year.
Monday was the busiest single day in its history, when 1,365 calls came in.
Concerns are particularly acute for those struggling to pay priority bills such as council tax and rent.
The colder weather could also place extra strain on vulnerable households, with £4.4bn already owed to energy suppliers following a period of high prices, although the government’s cold weather payments have been triggered in many areas.
Charities are urging anyone whose debt has become unmanageable to seek help as soon as possible, rather than making matters worse by ignoring the situation.
That is a view shared by Dave, who has managed to work his way out of difficulty.
A few years ago, he found his previously manageable credit card debt becoming a problem when he was unexpectedly made redundant at the same time as going through a divorce.
“They were two quite dramatic things in six months,” said Dave, who has previously spoken to the BBC about his debt issues.
“The debt was around £20,000 to £25,000 at its height. It became so overwhelming. You feel that you are letting creditors down because you want to do what they ask of you – but you are scared, you are renting, and at times you struggle to get through each day.
“Once you are in a spiral, it is really hard to get out of it.”
He is now working in insurance, his debts are manageable and being paid off, and he said he wanted to help others “to show that you can get through these things”.
Figures published earlier in the week by the Bank of England fuelled concerns that everyday costs were becoming harder for some households to manage without turning to borrowing.
The data showed that credit card borrowing grew at the fastest annual rate in nearly two years in the run-up to Christmas.
The annual growth rate for credit card borrowing increased to 12.1% in November, from 10.9% the previous month – the highest figure since January 2024 when it was 12.5%.
Nutrition labels on the front of food packaging should be made mandatory in the UK, according to a consumer champion.
Which? called on the Government to make the change amid what it described as an “obesity crisis”.
A “better approach” is needed to help people make healthier choices, it said.
It comes after research by the group found shoppers prefer traffic light labelling, although they said it could be improved with more prominent placing and increased size.
Traffic light labelling on food packaging was introduced in 2013 and uses green (low), amber (medium), and red (high) colours to show fat, saturated fat, sugar, and salt content, plus calories.
The system is not mandatory in the UK, although it is voluntarily used by major manufacturers and retailers.
However, according to Which? the system is used inconsistently.
It claims some shops do not include traffic light labelling, or provide it without colour coding.
Research by Which? captured insights through the mobile phones of more than 500 shoppers to find out how the traffic light system is working for customers.
A third (33%) said that the nutrition label was the first thing they looked at on the front of a pack.
People most used the traffic light system when choosing snacks (56%), dairy products (33%) and breakfast cereals (27%).
Almost half (47%) said they found this labelling easy to understand.
In focus groups, the traffic light system was the preferred food labelling option, although suggestions to improve it included making it more prominent and larger.
Which? said that people also called for making the scheme easier to understand, such as making the recommended serving size on some products more realistic and consistent.
The consumer champion is now calling on the Government to introduce a mandatory front-of-pack nutrition labelling scheme.
It said this could build on the existing traffic light system to make it work better for shoppers by bolstering consistency, making it more prominent and removing aspects people may find confusing.
Sue Davies, head of food policy at Which?, said: “The UK is in the midst of an obesity crisis and it’s clear that a better approach to front-of-pack labelling is needed to help shoppers make healthier choices.
“Which? is calling on the Government to ensure that all manufacturers and retailers use front of pack nutrition labelling, ideally by making this mandatory.
“Our research shows that people still prefer traffic light nutrition labelling, but that the current scheme needs updating so that it is clearer and simpler and works better for consumers.
“The new system should be backed up with effective enforcement and oversight by the Food Standards Agency and Food Standards Scotland, so shoppers have full trust in the labels on their food.”
In 2022, some 64% of adults in England were estimated to be overweight or living with obesity.
In November it also emerged that one in 10 children in the first year of primary school in England is obese, the highest figure on record outside the pandemic.
It is estimated that obesity costs the NHS more than £11 billion every year.
A Department of Health and Social Care spokesperson said: “This Government is bringing in a modernised food nutrient scoring system to reduce obesity.
“It’s just one element of the strong action we are taking to tackle the obesity crisis as part of our 10 Year Health Plan, which will shift the focus from sickness to prevention.
“We are also restricting advertising of junk food on TV and online, limiting volume price promotions on less healthy foods and introducing mandatory reporting on sales of healthy food.”
Andrea Martinez-Inchausti, assistant director of food at the British Retail Consortium, said: “Retailers have led the way in nutrition labelling, consistently providing advice on healthy living.
“Whether that be through the traffic light system, or other measures, the industry is fully committed to helping improve the health of their customers and are constantly looking for what will work best for them.”
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