Current account deficit soars to $8.4 billion

Country''s current account (CA) deficit climbed by some 44 percent to new peak level of 8.4 billion dollar during the July-February of current fiscal year due to the rising goods and services trade deficit.
First time in the history of the Pakistan current account (CA) deficit has crossed 8 billion-dollar mark, as during the last fiscal it was at the all time high level of 7.016 billion dollar. The current account deficit during the July-February is some 20 percent high over the last fiscal year 2007 deficit.
Officials statistics revealed on Thursday that during the first eight months of current fiscal year 2008 country has faced a deficit of 8.421 billion dollar as compared to some 5.85 billion dollar during the same period of the last fiscal, depicting an increase of 43.77 percent during the July-February of current fiscal year. "Despite the huge inflows on account of workers remittances, has reached some 4 billion dollar during current fiscal, the deficit has posted an up surge mainly due to the increase in current account deficit has been contributed by trade, services and income sector deficit," economists said.
The chief factor of escalating current account deficit is the huge payments of interest and dividends, besides slow growth in the exports of goods and services sector, they added.
They said that government has failed to achieve the export growth target during the current fiscal year and overall exports growth stood at seven percent against the current fiscal target of 13 percent, while increasing imports has also pushed the deficit on upward side.
Statistics indicated that principal factors responsible for the widening of current account deficit include a widening trade deficit by 9.09 billion dollar, services sector deficit by 4.22 billion dollar and some 2.4 billion dollar in income deficit. While, the overall deficit including trade, services and income stood at 15.721 billion dollar against the current account transfers of 7.396 billion dollar during the first eight months of current fiscal year 2008.
The country''s goods trade deficit stood at 9.09 billion dollar, with 12.63 billion dollar exports and some 21.72 billion dollar imports during the current fiscal year.
While, country''s altogether income from abroad stood at 1.145 billion dollar as compared to 3.54 billion payments of income to the overseas. In addition, services sector imports reached 6.34 billion dollar against the exports of 2.12 billion dollar.
The statistics depicted that State Bank of Pakistan''s (SBP) reserves stood at 12.304 billion dollar during July-February as against the some 11.78 billion dollar during the corresponding period of the last fiscal 2007.