The current account swung sharply into deficit in the 2004-05 fiscal year, official data showed on Thursday, a result analysts said was due to high oil prices and accelerating growth raising demand for imports.
The current account deficit hit $1.526 billion in the year to June 30, a deterioration of over $3.3 billion from a $1.811 billion surplus in 2003-04, central bank figures showed. Provisional data posted by the State Bank of Pakistan on its Website showed the 2004-05 trade deficit was $4.523 billion as compared to a deficit of $1.279 billion in 2003-04.
Analysts said that while the current account deficit had grown sharply it was not alarming. Asif Qureshi, research head at Invisor Securities, a Karachi-based brokerage House, said the deficit was equal to about 1.4 percent of gross domestic product (GDP).
Mohammed Sohail, director of research at Jahangir Siddiqui Capital Markets, said the deficit was not a problem given Pakistan's growing economy.
"We have seen a significant rise in imports of machinery and raw material, which is healthy," he said. "Plus, not only have oil prices risen but oil consumption and imports have also risen due to increased economic activity," he said.
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