KARACHI, Nov 17: Pakistan’s current account deficit rose sharply in the first four months of the running fiscal to $5.943 billion, reflecting the depressing inflow and the higher outflow of the foreign exchange.

Data issued by the State Bank showed on Monday that the current account deficit during July-October 2008-09 was 98.5 per cent higher than the corresponding period of last year.

The country is facing a serious balance of payments problem and reached an agreement with the International Monetary Fund (IMF) to meet the imbalances.

The imbalances are rising despite steep fall of oil and food prices in the world market which forced the government to spend over $12 billion alone to import petroleum products during the last fiscal ended on June 30, 2008.

The four-month data tells that Pakistan was still paying the highest amount for import of oil and food.

During the period, Pakistan’s payment for oil went higher than the four months of last year. The oil bills rose to $4.924 billion compared to $2.551 billion of last year which is 93 per cent higher.

The oil prices, which had reached $147 per barrel during this calendar year, have now fallen to just $50 a barrel. The demand fell in the developed economies because of slowdown of economic growth after financial meltdown started a year ago.

The food bill of the four months rose to $1.577 billion against the corresponding period of last year when the food bill was limited to $890 million. This is 77 per cent higher.

The State Bank report reflected a continued steep rise in import bill while the export was rising with traditional speed of just 14 per cent. The import of four months reached $12.899 billion which is 35 per cent higher than previous year’s four months.

Pakistan reached an agreement with the IMF for a total loan of $7.6 billion for two main purposes; first to meet the severe balance of payments problem and secondly to strengthen the exchange rate.

Analysts said the second quarter report (October-December) would reflect the falling oil and food prices and the balance of payments position would improve.

They said the government’s effort to reduce the import bill seems to have failed and the prescription for the purposes lost its significance.

“We are curiously watching the balance sheet of the country. If it improves, the economy will get strength and recovery from the current economic status is possible,” said an analyst.

“But the impact of IMF loan is equally important to be watched as interest rate has gone up to 15 per cent and a slowdown of economy might not allow its recovery in short term,” he said.

“If the economy goes for a long-term recovery, its dependence on economy will prevail and hard time for general people will not be over for at least three to five years,” he said.