The current account deficit of the country widened to $5.473 billion in July-Feb of the current fiscal year, owing to the sliding exports and lower inflows of direct investment and remittances, according to data released by the State Bank of Pakistan (SBP).
On the other hand, the SBP figures show that the country’s Gross Domestic Product (GDP) increased by 12.51 per cent to $213.190 billion in July-Feb 2016-17, compared to $189.474 billion in the same period of the last fiscal year. According to the SBP’s project, on full year GDP would increase by 5 – 5.50 per cent in the current fiscal year.
The current account deficit widens by 120 per cent to (negative) $5.473 billion in the last eight months of this fiscal year while it stood at (negative) $2.482 billion in the same period last year. “The balance of payments account of the country is not stable because of a higher trade deficit and low remittances in the last eight months,” the analyst said.
The import bill touched $29.4 billion, which is almost double the amount of locally exported goods, the SBP’s data said. After announcement of a textile package of Rs 180 billion, its being hoped that the export volume of the country will improve in the remaining months. The central bank, from March, has imposed a 100 per cent cash margin condition on the import of all luxurious items, which will help the liquidity problems of the country, the analyst claimed.
The analyst said, “our import bill is also linked with international oil prices, which have moved up in January and February 2017.” The import bill of oil companies in Pakistan will likely enhance in the next four months, he added. The central bank is facing payment pressure of international donor agencies including the International Monetary Fund (IMF) as the current account is still hovering in deficit, he added.
The central bank has so far maintained the exchange rates in the interbank market despite pressure on the dollar. Now it is being traded in the interbank market at Rs 104.76 today, compared to $104.80 in February 2016. The exports of the country decreased to $14.051 billion in July-February 2016-17, while imports touched an all-time high of $29.446 billion during the same period, the SBP data said.
According to the data released by SBP, the country’s export stood at $14.051 billion in the last eight months of the current fiscal year, compared to $14.339 billion down by $288 million, while imports of the country touched $29.443 billion compared to $26.472 billion in the same period last year.
Total foreign investment in the country has enhanced by 46.5 per cent to $1.934 billion in the last eight months of the current fiscal year, mainly due to the power, food, and oil and gas sectors. During the period, the central bank received an amount of $1.003 billion in Foreign Public Portfolio Investment (Debt securities), which increased by 120.1 per cent during July-Feb 2016-17, the data added.
Overseas Pakistani workers remitted $12.363 billion in the first eight months (July to February) of 2016-17 down by 2.4 per cent or $314 million, compared with $12.677 billion received during the same period in the preceding year. During February 2017, the inflow of worker’s remittances amounted to $1.417 billion, which is 4.7 per cent lower than January 2017 and 6.9 per cent less than February 2016.