KARACHI: The current account deficit crossed the $1-billion-mark at the end of third quarter of this fiscal year.

The State Bank reported on Wednesday that the current account deficit for July-March 2012-13 rose to $1.028bn. However it was still one third of $3.038bn deficit the country posted in the first nine months of 2011-12.

The widening of current account deficit is pushing the country closer to default on external front owing to massive outflow for repayments to IMF while the reserves of the State Bank have fallen sharply to six-year low.

The State Bank’s reserves fell to $6.6 billion on April 5 reflecting the weakening position of the country. There is no major move on government side to improve the situation.

The only hope that gives strength to the economic managers is remittances, which have also started witnessing slow growth over the last year. Remittances are the second highest dollar earnings after export proceeds.

The State Bank reported that the country witnessed a net deficit of $413m in March alone. The intensity of the rising deficit problem was more visible in the third quarter of the current fiscal.

The current account deficit during January-March was $1.215bn but the total deficit of nine months reduced due to surplus in the first quarter. The first quarter recorded a current account surplus of $344m.

The current account deficit as percentage of gross domestic product during the nine months was minus 0.6 per cent compared to minus 1.8 per cent during the same period last year.

Due to general elections in the country the uncertainty is higher on political side while the increasing terrorism has shocked both the domestic as well as foreign investors.

The foreign direct investment during the nine months was about $622m giving no encouraging sign for the country facing complex problems requires huge investment to get over the problems like energy crisis.

Economists and analysts said they feel urgency for the deficit problem but it is disappointing that nothing is being done to avoid the default which is coming closer with the passage of each day.