Current account deficit narrows 14pc: The News

KARACHI: Pakistan’s current account deficit narrowed by 13.7 per cent between July and February 2008-09 over the same period of previous year after improvement in trade balance and overseas Pakistanis sent home more remittances.

In the first eight months of the current fiscal year, the deficit in current account balance shrank to $7.45 billion from $8.64bn in the same period of 2007-08, showed the State Bank of Pakistan’s data released on Wednesday.

Trade deficit came down to $8.8bn from $9.2bn as exports slightly improved while falling international commodity prices slowed import growth, it revealed.

A freefall in international prices of commodities like crude oil and edible oil, which Pakistan heavily imports, has helped improve a worsening trade balance, one of the reasons which compelled the country to seek International Monetary Fund’s loan to avert a balance of payments crisis.

Exports between July and Feb 2008-09 totalled $13bn against $12.4bn recorded in the corresponding period of previous year. In the same period, imports were $21.8bn against previous $21.7bn.

Even though imports are a little higher, their growth has been substantially controlled when compared with the first July-Sept quarter of 2008-09. Trade deficit almost doubled to $4.1bn in the first quarter compared to previous year’s $2.3bn.

Another factor which greatly contributed to improving the current account deficit was workers’ remittances, which went up to $4.9bn from $4.1bn in eight months.

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