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KARACHI: The current account deficit for 2MFY19 further widened by 10 per cent, compared to the same period of last fiscal - indicating that the deficit trend is still on the rise.

The State Bank of Pakistan (SBP) on Wednesday reported that the current account deficit during July-August FY19 increased to $2.721 billion as against $2.477bn in the corresponding period of last year.

In FY18, the current account deficit jumped 33 pc to $18bn while the FY17 figure stood at $12bn.

This massive increase and size of the deficit has put enormous pressure on external front of the economy with newly elected government taking a number of steps to cut the size of this deficit. The government on Tuesday introduced new measures to reduce the import bill such as increasing duties, particularly on import of luxuries.

The exports during the two months rose by $177m to $4.096bn while imports increased by $987m to $9.959bn. As a result, the balance of trade in goods clocked in at negative $5.863bn.

Similarly, the trade deficit in goods and services collectively rose to $6.625bn during the period under review.

Some relief was felt on the external front as remittances in the first two months of 2018-19 grew 13pc to $4bn, but that was largely offset after a 40pc drop in foreign direct investments to $288m.

Published in Dawn, September 20th, 2018