Pakistan: Political crisis, floods threat to economy

The State Bank of Pakistan said that the current political crisis and devastating floods in the country are a threat to the economy. In a policy statement, the central bank expects the floods, which killed hundreds of people and submerged vast agriculture lands in Sindh and Punjab, to temporarily disrupt the supply chain. The central bank’s Monetary Policy Committee also noted festering risks to the economic outlook of the country, saying the ongoing political impasse, delay in the finalisation of the fourth IMF review, and the current heavy rains and floods, which have engulfed central and southern Punjab, threaten the nascent recovery in economic activity. Finance Minister Ishaq Dar at the news briefing, along with the Asian Development Bank president, said the country would miss its growth target as floods and political turmoil have hit GDP growth. The headline inflation declined to 7 per cent in August, which is its lowest level since June 2013, but the SBP warned that inflation could increase in future that can raise the prices of commodities, according to thenews.com