Current Account deficit rises to $454m

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KARACHI: The current account deficit of the country rose in the first month of the current fiscal year as compared to July last year and June 2014.
According to the State Bank of Pakistan, the current account deficit on July 15 was $454 million, much higher than $125 million last year.
Despite very high remittances of about $16 billion, the current account deficit is a serious concern for the government which has borrowed heavily from the international lenders on unexpectedly high rate of return. This could further escalate the seriousness of imbalances on external fronts.
In FY2013-14, the total current account deficit was $2.97 billion, 19 percent higher than the preceding year, and it happened despite large inflows of dollars.
The ever increasing trade deficit has been real problem for economic mangers as they have failed to control its size. The figure was $135 million in June this year, which means a surge of $319 million in July to make the total $454 million.
Though the size of foreign reserves is enough to meet the deficit, it could rise above $5 billion this fiscal year if it continues to increase with the volume like in July.
The continued political uncertainty has jammed the economic machinery. The trade and industry people say the entire government, including finance and commerce ministries, is busy tackling the turmoil engulfing the country.