KARACHI: Pakistan’s current account deficit continues to swell on the back of declining exports and increasing import bills.
The deficit has widened 204.7 percent in the ten months of current fiscal year 2016-17, 10MFY17. According to statistics released by State Bank of Pakistan (SBP) here on Wednesday the current account deficit has widened to $7.2 billion in the period of July 2016 to April 2017 as compared to $2.3 billion deficit recorded during the same period of the last fiscal year, FY16. The current account deficit rose to 2.7% of the Gross Domestic Product GDP in the ten months of 2016-17 as opposed to 1% in the same period of last fiscal year, the data shows. During the ten months of current fiscal year the exports decline to $17.9 billion against growth of $18. billion worth of goods exported from Pakistan in the same period last year. The data shows that the imports increased to $37.8 billion. Thus the balance of trade in goods was recorded at $19.9 billion. The services sector’s exports increased during the current fiscal year to $4.7 billion while imports stood at $7 billion. Services sector’s deficit in the current year increased to $2.3 billion against $2.2 billion of the last fiscal. The accumulated balance of goods and services increased to $22.2 billion against $16.8 billion of the same period last year. The workers’ remittances also suffered by 2.7 percent to $15.5 billion from $16 billion sent by overseas Pakistanis during the ten months of last year. The current account, broadest measure of trade, covers flows of goods, services and investment. The current account is an important indicator of economy’s health. Keeping in view the swelling current account deficit experts call for reviewing country’s trade policy. Major factor responsible for the swelling balance of payment deficit is the declining exports from the country coupled with less inflow of remittances and increasing cost of production. Economists also suggest restricting the imports of goods that are already being produced in the country and the decision should be made in the trade policy rather than in budgets.
