KARACHI: The country’s current account deficit jumped by 50 per cent in the first eight months of FY18, making it more difficult for the country to meet the gap as its reserves continue to fall.

The State Bank of Pakistan reported on Tuesday the current account deficit of the country rose to $10.826 billion during July-February FY18 compared to $7.216bn in the same period.

The government is desperately looking for an option to reduce the increased deficit but the trade deficit could not be curtailed despite a 5pc devaluation of local currency in December 2017.

During FY17, Pakistan posted a current account deficit of $12.2bn (4pc of GDP) as compared to $2.6bn (0.9 pc of GDP) in FY16 indicating that the deficit has been rising as threat to the economy.

For the month of February, however, the trade deficit shrank by 16.55pc month-on-month to $2,687m, from $3,220m in January 2018.

The remittances being sent by the overseas Pakistanis showed some improvement and the exports also increased up to 11pc during the last eight months but the increased trade deficit has hampered any possibility to curtail the current account deficit.

The imports of goods and services cost the country about $42.6bn during July-Feb FY18 versus its exports of $19.4bn.

Pakistan is struggling to increase its exports by providing cheaper money and a number of incentives to the exporters but the result was not up to the mark. Moreover, the rise in exports was mainly due to price hike of goods in the international market while the volume of exports could hardly increase during the eight months 2017-18.

Published in Dawn, March 21st, 2018