Daily Times

KARACHI: Declining exports, worker remittances and foreign exchange inflows continue to dent Pakistan’s balance of payments as the country’s current account deficit swelled by 90 percent in the first seven months of current fiscal year 2016-17, 7MFY17.

According to statistics issued by State Bank of Pakistan (SBP), the current account deficit widened to $4.7 billion in the period of July 2016 to January 2017 as compared to $2.4 billion deficit recorded in the similar period of the last fiscal year.

During the last seven months of current fiscal the exports decline by 1.3 percent to $12.3 billion against $12.4 billion worth of goods exported in the same period last year. The data shows that the imports increased by 4 percent to $25.5 billion during the same period. Thus the balance of trade in goods recorded at $13.2 billion against $10.9 billion of 7 months of last fiscal year.

The services sector’s exports also suffered by $1.9 billion as exports were recorded at $2.8 billion while imports stood at $4.8 billion. Services sector’s deficit in the last fiscal was $1.9 billion. The accumulated balance of goods and services stood at $15.2 billion against $12.4 billion of the same period last year.

Another major blow to the balance of payment was workers remittance inflows which are continuously falling. Recently around 40,000 workers were expelled from Saudi Arabia and other gulf countries sending a strong signal that the remittances inflows will suffer further. During 7 months of current year remittance dropped by 1.9 percent to $10.9 billion.

The current account, broadest measure of trade, covers flows of goods, services and investment. The current account is an important indicator of economy’s health. Keeping in view the swelling current account deficit experts call for measures to enhance country’s exports by redrawing trade policy. The exports from Pakistan are continuously declining, a major dent to the national economy. Last month, the prime minister announced a package for the textile sector but the tangible results of the package are not expected immediately.