This report focuses on the financial impacts of natural disasters on the budget of the Government of Pakistan (GoP).

The study presents a series of complementary options for development of a national disaster risk financing strategy, based on a preliminary fiscal risk analysis and a preliminary review of the current budget management of natural disasters in Pakistan.

The study presents options for a national disaster risk financing strategy for Pakistan, drawing from international experience. It highlights that Pakistan faces a major financing challenge arising from natural catastrophes, with flooding causing an estimated annual economic impact of between 3 and 4 per cent of the Federal Budget. Although progress has been made on the establishment of financing mechanisms for dealing with disaster losses, the study argues that significant work still remains to operationalize structures and to ensure that financing mechanisms are appropriately provisioned.

[Adapted from source]