Daily Times

KARACHI: Pakistan’s current account deficit has swelled by 92 percent in the first half of current fiscal year 2016-17 mainly due to increasing import bills and declining inflows of foreign exchange from exports receipts and workers’ remittances.

According to statistics issued by State Bank of Pakistan (SBP), the current account deficit has widened to $3.6 billion in the period of July to December 2016 as compared to a $1.8 billion deficit registered in the similar period of the last fiscal year. During the last five months of the current fiscal year exports decline by 2.3 percent to $10.5 billion against $10.7 billion, period last year.

The data shows that imports increased 6 percent during the same period. Thus, the balance of trade in goods recorded at $10.8 billion against $9.3 billion of 6 months of the last fiscal year. The service sector’s exports also suffer by $1.7 billion as exports were recorded at $2.5 billion while imports stood at $4.2 billion. Service sector’s deficit in the last fiscal was $1.2 billion.

The accumulated balance of goods and services stood at $12.5 billion against $10.6 billion of the same period last year. The workers’ remittances also suffered by 2.3 percent to $9.4 billion from $9.6 billion sent during the first half of last fiscal year. 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 reviewing country’s trade policy. The exports from Pakistan are continuously declining causing major dent to the national economy. However, the announcement of textile package by the Prime Minister is likely to play important role in reversing the declining export trend, particularly exports of textile goods from the country.