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Current account deficit widens 90pc

Updated Feb 18, 2017 10:27am


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KARACHI: Current account deficit widened by more than 90 per cent year-on-year to $4.7 billion in July-Jan, the State Bank of Pakistan (SBP) reported on Friday.

A current account deficit indicates that Pakistan is a net borrower from the rest of the world. The widening gap is expected to spell trouble for the country’s external sector with negative consequences for the exchange rate.

The deficit in the trade in goods and services amounted to $15.2bn in the first seven months of 2016-17, up 22.1pc from a year ago. While the country failed to grow its exports in July-Jan, its imports rose by 9.1pc over the same period.

The current account deficit was 2.5pc as a percentage of GDP in July-Jan as opposed to 1.5pc during the same period in the preceding year.

Shrinking remittances, growing imports and stagnant exports have put the external sector under pressure in recent months.

Cuts in fiscal spending in the Middle East in the wake of low oil prices have had an adverse impact on remittances sent by overseas Pakistanis. Workers’ remittances amounted to $10.9bn in the seven months against $11.1bn inflows recorded in the comparable period of last year.

Published in Dawn, February 18th, 2017


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Comments (9) Closed

Justin Feb 18, 2017 11:30am

With Cpec this will only increase , net importer , net borrower and net poorer .

lost cause Feb 18, 2017 12:07pm

You are eating away the future of your coming generations. The consequences of your extravagance will do much harm to your neighbours in future. ( due to economic migration, lawlessness and terrorism)

Reader Feb 18, 2017 12:41pm

Most of the reflected imports is the machinery that is bought in agriculture and energy sector.

haroon Feb 18, 2017 01:07pm

with cpec pakistan will rise !!

Harsh Feb 18, 2017 02:48pm

Future of pakistan's economy with widening deficit, increasing loans n dropping fdi seems to be in dark

Amit Feb 19, 2017 12:45am

Don't worry... CPEC will make everything right ... LOL

jay Feb 19, 2017 01:22am

With CPEC, Chinese companies can set up factories along the corridor, use cheap Pakistani labor and then export the goods to middle east, Africa and further on to Europe and north and south America. Pakistan will then over come these financial problems and become a world power. Matter of time!

Vikas Feb 19, 2017 07:01pm

The future for Pakistan looks very bleak economically. It has to control its expenses, stop living lavishly on imports and devalue its currency substantially to stay competitive in the export markets. This devaluation can only be done by controlling its life style and dependence on exports. Not easy but the consequences are not bright. The other option of course is to wait hand on hand and keep believing in CPEC as a magic wand and when it comes it will automatically on its own take care of all problems. That's what most Pakistanis commenting in columns tend to believe. Good luck.

The other Feb 19, 2017 10:18pm

Chinese companies have un utilized capacities what will happen to that.