KARACHI: The country’s current account deficit widened further to $7.41 billion in the first half of this fiscal year, the State Bank of Pakistan (SBP) reported on Friday.

The six-month deficit increased by 59 per cent compared to the same period of last fiscal year, indicating more hardships for the country as its reserves are on a decline.

The second quarter (July-December) deficit of 3.87bn was higher than the first quarter giving no relief to the government as it struggles to improve exports to earn more dollars.

However, the trade deficit, which is the primary cause of the widening current account deficit, has increased despite duties imposed by the government on imports to reduce the import bill.

The deficit on trade in goods went up to $14.3bn against $11.3bn in the same period of last fiscal year. Despite slight improvement in exports, the trade deficit was significantly higher than previous fiscal year.

The services sector could not perform well enough to reduce the deficits. The imbalance on trade in goods and services jumped to $16.88bn compared to $13.6bn in the same period of last fiscal year.

The SBP in its latest report has asked the government to find other options to improve the foreign exchange inflows. The government borrowed $2.5bn in November through auction of bonds and more is expected in wake of falling reserves of the State Bank.

Published in Dawn, January 20th, 2018