The current account deficit of the country widened almost three-folds to $7.247 billion in July-April 2016-17 if we compare it with the same period of the last fiscal year. It broadened due to sliding exports and lower inflows of direct investment and remittances, according to data released by the State Bank of Pakistan (SBP) here on Wednesday.
On the other hand, the SBP figures show that the country’s Gross Domestic Product (GDP) enhanced by 11.21 per cent to $266.452 billion, compared to $236.572 billion in the same period last fiscal year. According to the SBP’s projection, full year GDP would remain around 5 – 5.50 per cent in the current fiscal year.
The current account deficit widened almost triple or 260 per cent to a (negative) $7.247 billion in the last ten months as it stood at (negative) $2.378 billion in the same period last fiscal year.
“Owing to the rising trade deficit and lower inflows of remittances, the situation of the current account balance of the country is unstable,” the analyst said. The import bills had touched $37.848 billion which is almost double of the local export’s inflows, the SBP’s data said.
“The export packages given by the government to the local exporters could not support the trade balance in last five months as the government was expecting,” the analyst said. The federal government announced a textile package of Rs 180 billion for the local exporters in February 2017. The central bank, from March this year, has imposed 100 per cent cash margin condition on the import of all luxurious items and imported vehicles. This decision of the SBP has controlled the local imports’ bill in last two months, the analyst claimed.
The analyst said, “our import bill is also linked with international oil prices, which has moved up in the last four months.” The import bill will likely enhance in the next two months, he added.
Commenting on Moody’s rating for Pakistan, the analyst said that the country hardly has three-and-a-half months’ import bill amount, which it has to provide in form of L/Cs, food import bills, edible oil import bills and crude oil bills.
The State Bank is facing payment pressure from international donor agencies including the International Monetary Fund (IMF). The central bank has so far maintained exchange rates in the interbank market despite pressure on the dollar. Now, it is being traded in the interbank market at Rs 104.83 today compared with $104.75 in April 2016.
The exports decreased by 2.29 per cent to $16.918 billion in July-April 2016-17, while imports touched all-time high at $43.473 billion or 40.12 per cent during the same period.
The country’s export stood at $16.918 billion in last ten months of the current fiscal year compared to $17.314 billion down by $396 million, while imports of the country touched $43.473 billion compared to $36.265 billion in the same period last years.
Total foreign investment increased by 105 per cent to $2.323 billion in last ten months of the current fiscal year compared with $1.133 billion in the same period last year.
The country received a direct investment of $1.733 billion in July-Apr 2016-17, up by 12.7 per cent compared to $1.537 billion in the same period last year. In April 2017, the country received inflows of $131.8 million in the head of direct investment, while it received $90 million in total foreign investment down by 13 per cent compared to $102 million received in April 2016.
Overseas Pakistani workers remitted $15.596 billion in first ten months (July to April) of 2016-17, down by $448 million or 2.8 per cent compared with $16.044 billion received during the same period of the preceding year.
During April 2017, the inflow of workers’ remittances amounted to $1.539 million, which is 9.2 per cent lower than March 2017 and 7.11 per cent less than April 2016.
