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Current account deficit surges 92pc

Published Jan 19, 2017 06:59am

KARACHI: The current account deficit for the first half of 2016-17 jumped 92 per cent to $3.585 billion, the State Bank of Pakistan (SBP) reported on Wednesday.

The current account deficit has been increasing every month, indicating a growing problem for the government that is already under pressure because of falling export proceeds.

The deficit in October was $381 million, which jumped to $839m in November and further rose to $1,083m in December. This shows the current account deficit is getting out of hand in 2016-17.

All sources of foreign exchange, such as remittances and exports, are showing a declining trend. Remittances decreased 2.4pc year-on-year in July-Dec as thousands of Pakistanis lost jobs in the Middle East.

The export sector did not show any improvement that caused a bigger trade deficit. Furthermore, the import bill could not be curtailed despite the poor performance on the export front.

The only improvement was in the case of foreign investment, which increased 10pc in six months. However, it also depended on a one-off inflow from the Netherlands that invested $459m in December.

Published in Dawn, January 19th, 2017