July-November current account deficit up 91 percent

The country's current account deficit reached $2.6 billion, up over 90 percent, in first five months of this fiscal year (FY17), primarily driven by higher deficit of goods and services trade, besides slow foreign inflows. The State Bank of Pakistan's statistics revealed Tuesday that the country's current account deficit continues to deteriorate, posting a substantial increase of 90.96 percent during July-November of current fiscal year.
Current account balance registered a $2.601 billion deficit during July-November of FY17 compared to $1.362 billion in the corresponding period of FY16, depicting an increase of $1.24 billion. Month-on-month basis, during November 2016, current account posted a healthy deficit of $839 million compared to $381 million in October 2016. Independent economists argue that the deterioration in current account balance is a threat to the country's foreign exchange reserves as the government is compelled to spend millions of dollars every month to finance the current account.
They said statistics of the balance of payment clearly reflect that major deficit has been occurred from the goods and services sector. Urgent steps are needed to be taken to curtail higher goods and services imports otherwise the current account deficit will surge further in coming months.
The detailed analysis showed that cumulative deficit of goods, services and income rose by 9 percent or $953 million during the period under review. With the current upsurge, total deficit of goods, services and income sector surged to $11.8 billion in first five months of the current fiscal year against the deficit of $10.874 billion in the same period of last fiscal year.
The country's overall goods deficit stood at $8.62 billion with $8.708 billion exports and $17.328 billion imports in July-November of FY17, while previously the deficit stood at $7.583 billion in the corresponding period of last fiscal year. With an increase of 40 percent or $403 million, the deficit of services sector stood at $1.399 billion in first five months of FY17 compared to $996 million in the corresponding period of FY16. Similarly, with $2.026 billion payments and $245 million receipts, income sector deficit fell to $1.781 billion during July-November of current fiscal year.