The country’s current account deficit is deteriorating continuously as it has increased by 175 percent to $1.8 billion mark during the first five months of current fiscal year 2013-14 (FY14), which has primarily been driven by high deficit of trade and services sectors, besides slow foreign inflows. Economists say the deterioration in current account balance is a major threat to the depleting foreign exchange reserves, as every month government is compelled to spend millions of dollars to finance the current account deficit.
They said the statistics of the balance of payment clearly reflects that major deficit has been occurred from the goods and services sector. There is an urgent need of some steps to curtail higher goods’ and services’ imports, otherwise the current account deficit will further swell in the near future.
The State Bank of Pakistan on Friday revealed that current account balance has posted a massive deficit. The country’s current balance has registered a deficit of $1.885 billion during July-November of FY14 as compared to $684 million in corresponding period of FY13, depicting an increase of 175 percent or $1.2 billion. Statistics showed that cumulative deficit of goods, services and income has gone up by 16 percent during the period under review. With current upsurge, total deficit of goods, services and income sector has surged to $10 billion in the first five months of current fiscal year against $8.6 billion deficit in same period of last fiscal year.
The country’s overall goods’ import stood at $17.47 billion and exports at $10.2 billion with trade deficit of $7.2 billion during July-November of FY14, while the deficit was $6.6 billion in the corresponding period of last fiscal year. With an increase of 94 percent or $534 million, the deficit of services sector has reached $1.97 billion in first five months of FY14 as compared to $563 million in corresponding period of last fiscal year. Similarly, with $1.93 billion payments and $242 million receipts, income sector deficit has mounted to $204 million during July-Sep of current fiscal year.