The country witnessed a record high current account deficit of $10.6 billion in the financial year of 2016-17, on the back of higher import bills and shrinking receipts through exports earnings and remittances inflows.
According to the data released by State Bank of Pakistan (SBP), the current account deficit was astronomically 132 percent higher than the previous year, when it stood at $4.58 billion.
The balance of trade actually caused the swelling deficit of current account this year. This has been attributed to high import bill of petroleum products, food items, power generation machinery and construction equipment.
The trade deficit exhibited a surge of $6.5 billion in the current financial year of 2016-17 to reach $ 23.6 billion as against of $ 17.1 billion during the last financial year.
Exports of the country slowed down to $19.7 billion as against of imports which ballooned to $43.4 billion in the closing financial year.
The service trade witnessed a level of deficit with its improvement of its exports. Nonetheless, it is worth noting that the persistent stagnation in Pakistan’s services exports, along with the recent decline in export of goods, does not bode well for the country’s current account balance.
On the other hand, remittances, which were once used to strongly support the current account, also faced pressure of lessening inflows from Pakistani expatriates living abroad.
The remittances inflows stood at $17.4 billion in the financial year of 2016-17 as compared to previous year when it stood at $17.8 billion.