KARACHI – Though the overseas Pakistanis sent record $10.3bn remittances, Pakistan’s current account deficit widened by $95 million in January to $2.307 billion in the first seven months (July-Jan) of the current fiscal year, as per a State Bank of Pakistan.
The SBP reported that the current account deficit still has strong presence in the balance sheet of the country, mainly on account of low exports and increased imports. The $10.3bn remittances could not help reduce the current account deficit, which was almost equal to the deficit of $2.537bn during the same period of 2013-14.
Imbalances on trade in goods increased to $10.696bn compared to $10.109bn a year earlier, showing the poor exports performance and unwanted growth in the volume of imports.
It could be painful for the economy if its size increases or even remains the same at the end of this fiscal year. The country paid about $7bn in debt servicing during the last fiscal year. The debt repayments could rise further this year and the deficit could escalate the problem for managing the external account.
