The country''s current account posted a deficit of over $2 billion during the first month of this fiscal year, mainly due to rising goods'' imports/exports disparity. Economists said the rising goods'' imports largely contributed to higher current account deficit during the initial month of this fiscal year. Goods'' imports jumped to $ 4.696 billion in July 2017 up from $ 1.618 billion in July 2016. Although goods'' exports also posted some growth, however the growth in exports is lesser than goods'' imports, they added.
They said higher goods'' imports are directly hurting the external account, therefore there was need for making a long-term policy to discourage the luxury or unwanted imports. The State Bank of Pakistan (SBP) Monday revealed that current account deficit rose sharply by 210 percent during the first month of current fiscal year (FY18). The country''s current balance posted a deficit of $ 2.053 billion in July of FY18 compared to $ 662 million in the same period of last fiscal year (FY17), depicting an increase of $ 1.391 billion.
The detailed analysis showed that cumulative deficit of goods, service and income surged by 65 percent during the period under review. With current increase, combined deficit of goods, services and income reached $ 3.738 billion in the first month of current fiscal year compared to $ 2.297 billion in the same period of last fiscal year.
Economists said inflows of home remittances registered some growth during the period under review and after witnessing a 3 percent decline in FY17, inflows of workers'' remittances increased by 16 percent in July 2017. Overseas Pakistani workers remitted $ 1.542 billion in the first month of FY18 as compared to $ 1.328 billion received during the same period in the preceding year, depicting a decline of $ 214 million.
With $ 4.696 billion imports and $ 1.809 billion export, the country''s goods deficit surged to $ 2.887 billion in July 2017 against $ 1.618 billion trade deficit in the corresponding period of last fiscal year.
During the period under review, services trade deficit posted an increase of 42 percent or $ 145 million. Services trade deficit stood at $ 489 million, with $ 404 million exports and $ 893 million imports in the first month of this fiscal year. Similarly, the deficit of income sector also witnessed some growth. With $ 409 million payments and $ 47 million receipts, primary income sector deficit surged to $ 362 million in July 2017. The country''s current account posted $ 12 billion deficit, up 148 percent, during the last fiscal year on the back of a widening trade deficit and slowdown in remittances.