* Flood will have implications for Pakistan budget
* Unclear how IMF program will be affected
(Adds details, quotes)
By Lesley Wroughton
WASHINGTON, Aug 9 Pakistan's floods, the worst
to hit the country in 80 years, will cause "major harm to the
economy," the International Monetary Fund said on Monday as
donors' and investors' concerns grew over the disaster's impact
on an already fragile economy.
The floods "are very likely to cause major harm to the
economy in terms of loss of output and budgetary consequences,"
an IMF spokesman told Reuters. "In these circumstances, support
from the international community will be critical."
The spokesman did not say whether the economic impact could
affect Pakistan's $11.3 billion IMF program, but he said IMF
officials were in touch with the authorities to assess the
Pakistan turned to the IMF for emergency financing in
November 2008 to avert a balance of payments crisis and shore
While economic growth has picked up, Pakistan has struggled
to meet some of the targets under the program, especially on
increasing tax revenue to allowing for greater government
The country was set to receive a disbursement of about $1.1
billion under the program following a performance review
scheduled by the IMF this month.
The spokesman said IMF Managing Director Dominique
Strauss-Kahn had told Pakistan President Asif Ali Zardari the
fund stands ready to discuss how to help Pakistan manage the
economic impact of the floods.
"Fund staff have been in touch with their Pakistani
counterparts to assess the situation and discuss ways to help,"
the spokesman added.
More than 1,600 people have died and about two million left
homeless by the flooding, which began 10 days ago after heavy
monsoon rains over the upper reaches of the Indus River basin
wreaked havoc from northern Pakistan to the southern province
of Sindh. For details, see [ID:nSGE67803O]