Following high imports and slow foreign inflows, the country's current account balance continued to deteriorate and posted a deficit of $2.162 billion during the first 10 months of current fiscal year (2013-14). Economists said the current account deficit is gradually widening for last few months because of slow foreign inflows particularly Coalition Support Fund (CSF) and higher income and services trade deficits.
"Foreign inflows are backbone of current account balance and in the absence of improved foreign inflows such as CSF, the government can't manage rising balance of payment deficit. However, they believed that CA deficit is likely to reduce in coming days as Pakistan is expecting some payments under CSF and 3G and 4G spectrum. The State Bank of Pakistan on Wednesday revealed that CA balance registered a deficit of $2.162 billion during July-April of current fiscal year compared to $1.574 billion in the corresponding period of last fiscal year, depicting a surge of 37 percent or $588 million. Cumulative deficit of trade, services and income stood at $1.858 billion over current account transfers of $1.651 billion.
Month-on-month basis, the country posted a deficit of $55 million during April 2014 compared to $90 million in March 2014. The SBP's statistics showed that higher income and services trade deficit are major contributors to the rising current account deficit. Services sector deficit stood at $2.171 billion with $4.189 billion exports and $6.36 billion imports in July-April of this fiscal year compared to a deficit of $931 billion with $5.86 billion exports and $6.791 billion import in the corresponding period of last fiscal year.
The country's overall goods imports stood at $34.297 billion and exports at $21 billion with a trade deficit of $13.259 billion during first 10 months of current fiscal year. Previously, it stood at $12.89 billion in the same period of last fiscal year. Similarly, income deficit also mounted to $3.156 billion with $438 million inflows and $3.594 billion outflows in July-April of FY14.