ISLAMABAD: Finance Minister Dr Miftah Ismail anticipates $1-2bn prior to the expiry of the PML-N government tenure on May 31.
Speaking to a leading national English daily, Ismail declined to identify the source and exact inflow amount, saying things were in process but insisted $1 to 2 billion dollars would be added to the country’s foreign exchange reserves.
Informed sources, however, said inflows were expected from a state-owned Chinese Bank and would support declining foreign exchange reserves which stood at $17.067bn as of May 11 – $10.8bn held by the State Bank of Pakistan and $6.268bn by commercial banks.
Pakistan had earlier received a $1bn loan from China at end-April that would be due for repayment in three years.
The government has already revised its estimates for external resources to almost $12bn from the original budget estimates of around $8bn; more than doubling commercial loans to almost $7.2bn from around $3bn for 2017-18.
The current foreign exchange reserves can cover less than three months of imports that have grown at an average rate of 15.6pc in the first nine months to $38.4bn despite the recent slowdown to 6pc in March. Exports, in comparison, have posted a 13pc growth in nine months over the last year to reach $15bn, despite a healthy 24.4pc growth in March.
At the end of 2017-18, exports are estimated to reach $25bn compared to full-year estimated imports of about $54.5bn, leaving a trade deficit close to $29.5bn.
After accounting for healthy remittances estimated at $20bn, the government expects the current account deficit by the end of the current year at about $16bn or 5pc of GDP. Reserves have been depleting at an average rate of $475-$500 million a month.
For next year, the government expects exports to go up to $27.3bn against estimated imports of $56.5bn, leaving a trade deficit of $29.2bn and current account deficit estimated at a conservative $12.5bn (3.8pc of GDP) for next fiscal year.
The full year current account deficit for the outgoing fiscal year is estimated at $13.7bn or 4.4pc of GDP. Therefore, the government concedes that high fiscal and current account deficits in 2017-18 may pose a challenge on the external front going forward.
