It was a record smashing Friday. The one made in Zimbabwe must be held proudly. The other one evident from the SBP numbers needs immediate attention, and must not be bettered or broken again. Pakistan’s current account deficit skyrocketed to a mammoth $18 billion in FY18. In terms of percentage of GDP – it was way above the 4 percent target at nearly 6 percent – up from 4.1 percent in FY17.

Such has been the freefall of late, that 4QFY18 alone contributed nearly one-third to the yearly CAD. Last month saw the monthly CAD cross $2 billion for only the second time in history, the other one being October 2008. Back then, oil was priced at double than it was in May 2018. All indications point towards pricier oil going forward. Pakistan has got to a CAD of $18 billion with oil averaging $63/bbl. Shudder at the thought of oil settling any higher.

The SBP foreign exchange reserves are back to under $10 billion and at $9.06 sit at the lowest since FY13. This indicates an import cover of 1.8 months. And imports have shown little signs of receding. The SBP has taken note of the precarious situation, and the recent round of monetary policy revision of 100 bps is indicative that things have gone out of hand.

The elephant in the room remains the trade balance. Rising imports at an alarming level need to be curtailed, and exports need to be beefed up. Regaining the lost ground on exports may take longer than correcting some of the imports in the near term.

The literally stagnant key avenues of workers’ remittances and FDI have also compounded the problem. And nothing close to a turnaround is expected around the corner on both these fronts. What are the options as Pakistan is going towards another IMF program? Will Pakistan adopt a stabilization framework to lower the pace of growth? Will Pakistan continue to feast on debt and wait on exports to improve? Something has to give, and soon.