Analysts are of the view that higher import bill was the major reason behind increasing CA deficit. The import of goods surged to $35.661 billion in the first eight months of current fiscal year as compared to $30.401 billion in the corresponding period in FY17 while the import of services increased to $6.970 billion in this period against $6.335 billion in the same period a year ago.
On the other hand, the export of goods stood at $15.970 billion in eight months this fiscal year against $14.231 billion in the same period in FY17. The export of services stood at $3.439 billion in this period against $3.575 billion in the same period a year ago.
Analysts said that rising import bill was due to meet the demands of projects related to China Pakistan Economic Corridor (CPEC). The CPEC-related energy and infrastructure projects are importing machinery, heavy vehicles and other equipment. They said the overseas Pakistani workers'' remittances and Foreign Direct Investment (FDI) inflows are not sufficient enough to offset a hefty current account deficit and the government is compelled to finance it by utilizing foreign exchange reserves.
According to the central bank, exports and workers'' remittances posted promising growth rates of 12.2 percent and 3.4 percent, respectively during July-February FY18 after showing a decline in the same period last year. However, the country''s external Balance of Payments position is under pressure due to large import bill. This has resulted in the widening of current account deficit which has translated into a demand-supply gap of foreign exchange. This adjustment in exchange rate remains broadly aligned with evolving fundamentals on the external front, it added.