Pakistan’s current account deficit has more than doubled to $12.1 billion in the year ended June, while its trade deficit surged to a record $33 billion as imports increased.
The reserves have fallen by a quarter to $14.3 billion since reaching a peak in October, while the rupee has remained stable. As a share of the economy, the nation’s 2.9 per cent projected current account gap compares with 1.5 per cent in India and 1.9 per cent in Indonesia, according to International Monetary Fund estimates.
Many factors, including political turmoil, twin deficits, and falling reserves, had led experts to believe that the government would mark down its currency, giving investors another reason to stay away from the world’s newest emerging market.
PM Shahid Khaqan Abbasi said that his government will focus on cutting “unnecessary” imports.
Abbasi expects economic growth will meet the government’s 6 per cent target for the year ending June because of Chinese investment in the nation.
China is financing power plants and infrastructure projects valued at more than $50 billion as part of Chinese President Xi Jinping’s “One Belt One Road” push. It will help end energy outages before elections.