KARACHI: The current account deficit widened by 148.5 per cent to an all-time high of $12.09 billion for 2016-17, the State Bank of Pakistan (SBP) reported on Wednesday.

The deficit was $4.86bn in the preceding fiscal year. The balance on trade in goods jumped to a deficit of $26.8bn compared to $19.3bn in 2015-16.

The government has failed to improve exports. Instead of growing foreign sales, Pakistan’s exports have been declining for the last four years. This is making it more difficult for the government to contain the rapid fall in foreign exchange reserves.

Rupee to come under more pressure

The balance on goods and services registered a deficit of $30.5bn compared to $22.7bn in 2015-16.

The growing current account deficit has practically neutralised the positive impact of about $19bn remittances sent by overseas Pakistanis. For the first time in more than a decade, remittances declined on a year-on-year basis in 2016-17.

Data shows unchecked imports proved disastrous for the external sector of the economy. The deficit hurts the country’s ability to sell bonds in the international market. The government has been planning to sell euro bonds. But the weakness on the external front with a $12.1bn current account deficit means that the government is unlikely to get a favourable rate of return.

Published in Dawn, July 20th, 2017

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Accessing the RSF

Accessing the RSF

RSF can help catalyse private sector inves­tment encouraging investment flows, build upon institutional partnerships with MDBs, other financial institutions.

Editorial

Madressah oversight
Updated 19 Dec, 2024

Madressah oversight

Bill should be reconsidered and Directorate General of Religious Education, formed to oversee seminaries, should not be rolled back.
Kurram’s misery
19 Dec, 2024

Kurram’s misery

THE unfolding humanitarian crisis in Kurram district, particularly in Parachinar city, has reached alarming...
Hiking gas rates
19 Dec, 2024

Hiking gas rates

IMPLEMENTATION of a new Ogra recommendation to increase the gas prices by an average 8.7pc or Rs142.45 per mmBtu in...
Geopolitical games
Updated 18 Dec, 2024

Geopolitical games

While Assad may be gone — and not many are mourning the end of his brutal rule — Syria’s future does not look promising.
Polio’s toll
18 Dec, 2024

Polio’s toll

MONDAY’s attacks on polio workers in Karak and Bannu that martyred Constable Irfanullah and wounded two ...
Development expenditure
18 Dec, 2024

Development expenditure

PAKISTAN’S infrastructure development woes are wide and deep. The country must annually spend at least 10pc of its...