KARACHI, Sept 15: Risks to the country’s external accounts seem to be increasing daily, with IMF repayments, lack of foreign investment and a ballooning fiscal deficit, things on the macroeconomic front by no means offer any optimism, warned analysts talking to Dawn on Saturday.

There seems no sense of urgency from the government, which makes one wonder: is this gross indifference or the calm before the storm?

The government may be comfortable with $15 billion reserves, much higher than $7.75 billion in October 2008 when it signed agreement for IMF standby loan arrangement.

But rising international oil prices and repayment of $2.5 billion to IMF this fiscal year could easily hemorrhage foreign exchange reserves and numbers could change overnight if panic sets in as the government has no back up plan to cope with the situation.

“Balance of payments pressure could reach a tipping point in early 2013,” said Shamila Chaudhary, South Asia Analyst at Eurasia Group in Washington.

The current account deficit widened to $297 million in the first two months of 2012-13, compared with $82 million in the same period last year.

The State Bank of Pakistan last month cut its policy rate by 150 basis points to 10.5 per cent, knowing that the projected inflation could remain slightly higher than the target, which analysts said shows serious concerns and raises a red flag.

“We are concerned, the SBP has also highlighted concerns in its recent monetary policy review,” said Sayem Ali, economist at Standard Chartered Bank.

“Investment spending has collapsed, the energy crisis is likely to worsen over the next couple of years and it seems only a matter of time before Pakistan head back to the IMF for another bailout,” he noted.

Some analysts feel there is no urgency on the government’s part as it is an election year.

“There is no urgency on the government’s part as there is sufficient fuel left for them to survive till early next year,” said Muzammil Aslam, Managing Director at Emerging Economics Research.

But some feel that short-term corrective measures may be taken in early 2013.

“We have heard this story before (BOP crisis), but this time, the stakes are more serious, at least for Pakistan People’s Party,” said Chaudhary.

“If PPP is able to remain in power to become the first ever civilian government to complete a full term, then managing the economic downfall will be its utmost priority from now until elections.”

Even though the macroeconomic numbers present a grim picture, the country’s main exchange hovering close to its record high and growth of retail shops and restaurants in the commercial hub seem to suggest a different story.

The Karachi Stock Exchange ended at 15,449.60 points on Friday, just 300 points below its all time high of 15,737.32 hit in April 2008. Companies’ profitability has increased on an average of 16 to 18 per cent year-on-year.

Real private consumption grew at 11.6 per cent in 2011-12 as compared to 3.7 per cent in 2010-11 and many analysts also think the undocumented economy of unreported cash transactions is strong.