Country''s current account deficit widened by 60 percent to all-time high peak of 9.8 billion dollars and over 6 percent of GDP during the first nine months of the current fiscal year, mainly due to slowdown in exports and rising trade deficit.
First time in the history of the Pakistan the current account deficit also rose to the historical level of 6.16 percent of GDP, which was stood at 4.8 percent by the end of last fiscal year. The economist has expressed deep concerned over the historical level of current account (CA) deficit and said this is a very critical situation for the country''s economy.
They said that after this peak level the government would be compelled to get new foreign loan to fulfil the increasing current account deficit. Rising trade deficit following the slow growth in the exports and high imports coupled with the rising oil and food import bill are the chief reason of this raise in the current account deficit, they said.
"This would put further pressure on the Pak rupee and the government have to rely on the foreign reserves to pay the foreign payments," they added. Official statistics revealed on Thursday that during July-March of the current fiscal year, the country has faced a current account deficit of 9.859 billion dollars as against the 6.168 billion dollars during the corresponding period last year, depicting an increase of some 3.691 billion dollars in nine months.
The State Bank of Pakistan statistics indicated that principal factors responsible for the widening of current account deficit include a widening trade deficit, which have rose to 10.946 billion dollars during first nine months of the current fiscal year earlier stood at 7.920 billion dollars during the same period last year.
While services trade deficit stood at 4.840 billion dollars and income deficit 2.697 billion dollars widened by 39 percent and 3.15 percent respectively during July-March of the current fiscal year. Meanwhile, the overall deficit, including trade, services, and income stood at 18.645 billion dollars against the current account transfers of 8.707 billion dollars.
During the first nine months, country''s altogether income from abroad stood at 1.270 billion dollars as compared to payments of 3.949 billion dollars to the overseas. In addition, services sector imports reached 7.238 billion dollars against the exports of 2.398 billion dollars.
Statistics show current account deficit without official transfers climbed to 10.264 billion dollars during the period compared to some 6.409 billion dollars during last fiscal year. Economist believed that if the export target would not be achieved during the current fiscal year then the current account deficit would reach the another peak level of 12 billion dollars by the end of June 2008. Current account basically shows the overall position of the country''s inflows and outflows payments.
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