CA deficit narrows: Progress made in reining in budget deficit: World Bank

The current account deficit in Pakistan has continued to narrow and the government has also made progress in reining in its budget deficit which remained high as a result of years of fiscal slippages, a latest World Bank report said. In its report, "January 2016 Global Economic Prospects," released Thursday, the World Bank said the budget deficit was brought down to 5.3 percent in fiscal year 2014-15 from 8.4 percent of GDP in fiscal year 2013. But, it added, the debt levels remained high at 65 percent of GDP (Gross Domestic Products) as a result of years of fiscal slippages, and interest payment costs are about 4.4 percent of GDP.
The current-account deficit had continued to narrow, reflecting lower oil import cost and strong remittance inflows, the report said. Inflation, which tends to be structurally high in the South Asia region, slowed further in 2015. The decline was showing signs of bottoming out, as oil prices stabilised, the report said. In India, drought for the second consecutive year in 2015 had weighed on farm output, with some indications of food price pressures starting to build toward the end of the year.