Sign in Subscribe
  • E-PAPERS
    • Profit Magazine
    • Pakistan Today
  • HEADLINES
  • FEATURED
  • OPINION
    • COMMENT
    • EDITORIAL
  • TECH
  • WORLD
  • SATIRE
  • PERSONAL FINANCE
    • CAREERS
    • COMMODITIES
    • FOREX
    • INSURANCE
    • MARKETS
    • MUTUAL FUNDS
    • Private Equity
    • REAL ESTATE
    • SPENDING
    • TAXATION
Sign in
Welcome!Log into your account
Forgot your password?
Create an account
Sign up
Welcome!Register for an account
A password will be e-mailed to you.
Password recovery
Recover your password
Search
Sign inSubscribe
Profit Profit by Pakistan Today
Profit Profit
  • E-PAPERS
    • Profit Magazine
    • Pakistan Today
  • HEADLINES
    • ECONOMY

      FPCCI signs partnership agreement with Greater Manchester Chamber of Commerce

      GOVERNANCE

      FBR gives additional powers to IR’s intelligence wing

      ECONOMY

      Trade deficit widens to $17.3bn in eight months

      ECONOMY

      Sale of petroleum products up 26pc in Feb

      HEADLINES

      Customs lauded for linking steel scrap value with London Metal Bulletin

  • FEATURED
    • FEATURED

      15 ways white-collar criminals are fleecing advertisers in Pakistan

      FEATURED

      Fauji Cement finally decides to expand

      FEATURED

      National bank recorded its highest profit ever. But has Usmani treated…

      FEATURED

      Why is Pakistan’s internet so slow?

      FEATURED

      Moody’s: Islamic banks will continue to grow as economies recover

  • OPINION
    • AllCOMMENTEDITORIAL
      COMMENT

      How a public-private partnership model will achieve import deletion

      EDITORIAL

      Dear offended reader…

      COMMENT

      Break the monopolies!

      COMMENT

      Here’s how we fix Pakistan’s SOE problem

  • TECH
    • TECH

      China to develop tech to deal with misbehaving apps, plug personal…

      TECH

      Australia’s competition chief claims victory after Facebook standoff

      GOVERNANCE

      Foreign exchange operations to be fully automated by June: SBP

      GOVERNANCE

      KP govt introduces online system to monitor uplift projects in tribal…

      TECH

      Fortnite creator takes Apple fight to EU antitrust regulators

  • WORLD
  • SATIRE
  • PERSONAL FINANCE
    • AllCAREERSCOMMODITIESFOREXINSURANCEMARKETSMUTUAL FUNDSPrivate EquityREAL ESTATESPENDINGTAXATION
      ECONOMY

      Stocks bounce back to recover overnight losses

      ECONOMY

      PSX sheds 271 points ahead of Senate polls

      ECONOMY

      Stocks retreat 100 points on profit booking

      ECONOMY

      Bearish spell continues as benchmark index sheds another 366 points

Current account deficit nosedives 48% MoM to $809m in January

During the first seven months (July-January) of the financial year 2018-19, the current account deficit declined by 17% year-on-year (YoY) to $8.424 billion

By
Mohammad Farooq
-
February 21, 2019
0
1060
Facebook
Twitter
Linkedin
WhatsApp
Email

    LAHORE: Current account deficit plunged 48% month-on-month (MoM) to $809 million for January compared to $1.544 billion in December last year.

    During the first seven months (July-January) of the financial year 2018-19, the current account deficit declined by 17% year-on-year (YoY) to $8.424 billion.

    The major reason for the fall in the deficit was driven by a 15% ($305 million) MoM rise in exports to $2.309 billion in January against $2.004 billion in December last year.

    The fall was further fueled by a 3% MoM decline in imports. And the MoM fall in CAD of $735 million was also supported by a decline in the overall trade deficit ($461 million).

    Remittances remained stagnant at $1.743 billion in January. During the first seven months (July-January) of FY19, 17% decline in the deficit was supported by a decline of $1.14 billion in imports of services alongside a 12% YoY i.e. $1.389 billion growth in remittances.

    Meanwhile, the balance on primary income increased from $2,985 million to $3,120 million, a growth of 4.5% and the balance on secondary income went up from $13,657 million to $14,400 million, growing by 5.44%.

    The current account to GDP ratio also declined to 4.9% during the first seven months of current FY19 against 5.4% posted during the same period of FY18.

    “Current account deficit for January down 54% versus January last year. Current account deficit for July to January is down $1.7 billion versus the same period last year. Decisive actions taken by the govt to rescue an economy inherited on the verge of default showing visible positive results,” said Finance Minister Asad Umar on Twitter.

    According to Pak Kuwait Investment Co AVP Research Adnan Sheikh, the decline in current account deficit in January was attributable to higher exports of $300 million and $150 million lower imports.

    He added, “Going forward current account deficit will be further supported by deferred oil payment facility expected to kick-in from this ongoing month.”

    While speaking to Profit, Arif Habib Limited’s Head of Research Samiullah Tariq said, “I think the government’s policies of discouraging imports are showing their results.”

    Mr Tariq believes the hike in interest rates by the central bank, rupee depreciation, increase in taxes on imports had helped drive down the current account deficit.

    He added, “Exports have also shown improvement and the majority decline was in the import of services to the tune of $1.14 billion.”

    In January, foreign direct investment (FDI) registered a 2.56% increase to $132.2 million compared to $128.9 million received in January 2018.

    On average, the FDI recorded a decline of 17.6pc as it fell from $1.761 billion in July-January 2017-18 to $1.451 billion in the first seven months of FY19.

    The country-wise data suggested that net foreign investment from China posted a negative growth as it fell to $819.6 million during the period under review compared to the investment of $1,145 million recorded during the same period of last year.

    Foreign investment from the United States plunged from $513.4 million in Jul-Jan (2017-18) to negative $151.4 million in the same period of the current FY19.

    But foreign investment from the United Kingdom jumped from $48.2 million to $112.3 million in the first seven months of FY19.

    Similarly, FDI from the United Arab Emirates increased from negative $28.7 million in the corresponding period of the previous year to $55.8 million in the same period of the current year.

    To rein in demand, the central bank has allowed the rupee to depreciate by approximately 28% since December 2017 and made borrowing expensive by hiking the key interest rate by 450 basis points to 10.25% at end of January.

    Pakistan’s current account deficit had swelled to a record high of $18 billion in FY17-18 mainly due to a surge in imports and less-than-forecast inflows.

     

     

    • TAGS
    • Balance of Trade
    • current account deficit
    • exports
    • Foreign Direct Investment
    • imports
    • Services imports
    Facebook
    Twitter
    Linkedin
    WhatsApp
    Email
      Mohammad Farooq
      Mohammad Farooq
      The author is an Assistant News Editor at Profit by Pakistan Today. His works have been published in Dawn, Express Tribune, LiveMint India, Huffingtonpost India and The News on Sunday. He tweets @MohammadFarooq_

      RELATED ARTICLESMORE FROM AUTHOR

      ECONOMY

      Domestic cement despatches up 6pc in February; exports drop 18pc

      HEADLINES

      Exports drop 4.5pc in February

      HEADLINES

      Exports of ICT, telecom services increased 38pc in 7MFY21: Razak

      Whatsapp Newsletter
      Email Newsletter News Tips
      Profit by Pakistan Today
      Executive Editor: Babar Nizami l Managing Editor: Yousaf Nizami l Managing Editor Magazine: Farooq Tirmizi I Editor Multimedia: Umar Aziz I Editors: Zaman Khan I Abdullah Niazi I Mariam Zermina I Reporters: Meiryum Ali I Ariba Shahid I Babar Khan Javed I Taimoor Hassan l Hassan Naqvi l Shahab Omer l Ghulam Abbass l Ahmad Ahmadani l Shehzad Paracha l Aziz Buneri I Layout: Rizwan Ahmad I Video Editor: Talha Farooqi I Fawad Shakeel I Photographers: Zubair Mehfooz & Imran Gillani I Business, Economic & Financial news by 'Pakistan Today'
      Contact us: [email protected]
      • Privacy policy
      Copyright © 2021. Pakistan Today. All Rights Reserved.