The country''s current account deficit crossed $5 billion mark in the first four months of this fiscal year (FY18), mainly due to rising goods'' imports/exports disparity. Economists said slow growth in home remittances inflows and rising goods trade deficit, followed by higher imports, are responsible for massive surge in current account deficit during the initial months of this fiscal year. During the period under review, growth in home remittances has weakened as its inflows posted only 2 percent growth to stand at $6.4 billion.
They said although, goods exports also posted some growth, however the growth in exports is lesser than imports. During the initial four months of this fiscal year goods import surged by 30 percent to $17.395 billion against 11 percent growth in exports, which stood at $7.656 billion. "The official claims that most of the imports related to machinery for infrastructure purposes which is a good sign for a developing economy," they added.
The State Bank of Pakistan (SBP) on Monday revealed that current account deficit sharply increased by 122 percent during the initial four months of the current fiscal year. The country''s current account posted $5.013 billion deficit in July-Oct of FY18 compared to $2.259 billion in the same period of last fiscal year (FY17), depicting an increase of $2.754 billion.
The detailed analysis showed that cumulative deficit of goods trade, service and income surged by 30 percent during the period under review. With current increase, combined deficit of goods, services and income reached $12.824 billion in first four month of current fiscal year compared to $9.866 billion in the same period of last fiscal year.
With $17.395 billion imports and $7.656 billion exports, the country''s goods trade deficit surged to $9.739 billion in July-Oct of FY18 against $6.898 billion trade deficit in the corresponding period of last fiscal year.
During the period under review, services trade deficit stood at $1.6 billion, with $3.23 billion imports and $1.663 billion exports. Similarly, deficit of income sector also witnessed some growth. With $1.639 billion payments and $214 million receipts, primary income sector deficit surged to $1.425 billion in July-Oct of FY18.
The country''s current account had posted $12 billion deficit, up 148 percent, during the last fiscal year weighed by a widening trade deficit and slow growth in remittances.
Copyright Business Recorder, 2017