Islamabad Chamber of Small Traders (ICST) on Sunday expressed concern over widening current account deficit and asked the government to take steps to arrest the fall. Current account deficit widened to $591 million in July 2016, more than double from $234 million in the same month of last fiscal year, it said.
The deficit during the first month of the current fiscal year posted an expansion of 152 percent from the corresponding month last year which is disturbing, said Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt. In a statement issued here today, he said that slowdown in remittances and low exports are behind the large current account deficit which must be tackled as it is a major blow to the balance of payments.
Shahid Rasheed Butt said that remittances inflows dipped to $1.3 billion in July 2016, compared with $1.663 billion in the same month of the last fiscal year. Remittances inflows are likely to face downturn due to economic slowdown in Arab nations. During the same period, the trade deficit increased to $2.1 billion against $1.76 billion in July 2015 owing to low textile exports and higher imports, he added.
He said that a slide of over 14 percent in foreign direct investment also took toll on overall current account balance, the inflows from Coalition Support Fund have stalled and IMF's regular inflow will not be available anymore.
He said that uncertainties about economic recovery in the EU in the post Brexit period may have repercussions for Pakistan therefore policymakers should start planning in the national interest.
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