The country''s current account deficit rose to $3.6 billion in first quarter of current fiscal year FY18 (July-September 2017) as compared to $1.6 billion recorded in the corresponding period in FY17. According to data issued by the State Bank of Pakistan, current account deficit during this period stood at 4.2 percent of GDP as compared to 2.2 percent in the same period last year.
During September, the CA deficit stood at $956 million against $550 million in August 2017. Trade deficit increased to $8.445 billion in this quarter as compared to $6.422 in the same quarter last year. Trade deficit during September 2017 remained flat on month-on-month basis at $2.2 billion. Both exports and imports declined by 17 percent and 8 percent to $1.7 billion and $3.9 billion, respectively. The decline was mainly due to lower number of working days as both Eid and Ashura holidays fell during the month, Muhammad Sohail, a leading analyst said. Further, remittances saw steep month-on-month decline of 34 percent to $1.3 billion due to high base effect (higher remittances in August owing to Eid and lower number of working days in September).
The overall balance of payment, which includes financial account and capital account, remained in red standing at $761 million in September 2017. Resultantly, foreign exchange reserves held by SBP in September 2017 stood at $13.9 billion against $14.7 billion in August 2017.
Foreign Direct Investment (FDI) fell by 12.7 percent on month-on-month basis to $205 million during September. During the period of July-September 2017, FDI was reported at $663 million, (up 57 percent over last year), mainly driven by Chinese investment.
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