KARACHI: Current account deficit for the first four months of this fiscal year widened to $1.759 billion because of higher import bill and lower growth in the export sector.

The State Bank reported on Wednesday that the current account deficit was $347 million in October, much higher than $79m in September, which pushed up July-October total to $1.759bn. The deficit during the same period of FY14 was $1.368bn.

The country’s weak balances on external front could get critical with the rising current account deficit. Though the remittances (recorded at $6bn in July-October) have been rising at a rate of 15 per cent, the export sector’s poor performance has quashed the positive impacts of higher inflows.

Despite low oil prices, the import bill increased by half a billion dollars during the four months compared to the same period last year. It means the import bill could have been much larger had oil prices been what they were before the start of downward spiral. The oil prices are 30 to 35pc down compared to last fiscal year.

Import bills of both the goods and services also rose during July-October, increasing to $18.319bn from $16.783bn last year. The size of the increase (difference), at $1.536bn, is very close to the four-month deficit of $1.759bn.

By contrast, the export of goods and services could hardly show any improvement, increasing slightly by $153m in the four months.

Published in Dawn, November 20th , 2014