The Economic Outlook for 2022-23 Simulations of the negative shock to the economy via the loss of output of agricultural commodities and livestock and a policy of containment of imports of raw materials and intermediate goods are undertaken with the Macroeconomic Model. The loss of output due to the floods in agriculture is as follows: Cotton Rice Wheat Sugarcane Vegetables, Fruits, etc. Livestock % Fall in output 40 20 10 10 15 4 This leads to the estimate of the overall loss of agricultural output of almost 7 percent. The overall impact of the floods on the GDP in 2022-23 is presented in Table 4.4. Table 4.4: Projected GDP Growth Rate in 2022-23 after the Floods IMF Projections Pre-Floods* Impact of Floods and Import containment Agriculture 3.0-7.0 Industry 4.0-7.5 Services 3.5-2.5 GDP 3.5-4.5 * Assumed sectoral growth rates (%) Growth Rate after Floods -4.0 -3.5 1.0 -1.0 The GDP growth rate in 2022-23 which was projected at 3.5 percent by the IMF is likely to fall to negative 1 percent. This represents a loss of$16 billion in the Gross National Income. 4.3 Balance of Payment Projections Prior to the Floods The balance of payments projections is of vital importance as they will indicate whether starting with low foreign exchange reserves Pakistan will be able to finance the current account deficit and honor all its external interest and debt repayment obligations in 2022­23. The precipitate fall in foreign exchange reserves that has already taken place is shown in Figure 4.1. 51