ISLAMABAD – Ministry of Finance on Friday said that the current accountdeficit was narrowed by 10.6 per cent in the first five months of thecurrent fiscal year as compared to the corresponding period of last year.
Clarifying a news item on current account deficit, appeared in a section ofpress on December 20, it said the news does not reflect the factualposition, a Finance Division press release said.
In this context, it explained that the current account deficit for themonth of November 2018 stood at $1.25 billion which is showing animprovement of 28 per cent when compared to $1.74 billion in the month ofNovember 2017.
It is also pertinent to mention that the current account deficit was over$2 billion in the month of April and May 2018.
However, current account deficit narrowed down 10.6 per cent to $6.1billion in the first five months of the current financial year as comparedto $6.8 billion of the same period of last year showing an improvement of10.6 per cent.
This improvement in the current account deficit was mainly due to anincrease in remittances by 12.6 per cent, deceleration in imports by 2.9per cent which reflects the impact of policy measures taken by thegovernment.
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The growth in imports is mainly explained by the increase in oil importsbill because of high international oil prices, whereas non-oil importscontracted by 4 per cent during the first four months of the current fiscalyear.
There was an expectation of receiving higher foreign inflows from bothprivate and official sources during the remaining period of the currentfinancial year. Furthermore recent bilateral arrangements including thedeferred oil payment facility would also be available to the market fromJanuary 2019 onwards.
The projected decrease in the current account deficit, that could befurther supported by the recent decline in international oil prices willbring stability in the foreign exchange market.
These developments would further stabilize the balance of payments andbuild foreign exchange reserves.
