ISLAMABAD – Massive economic achievement worth $7 billion for the PTIgovernment in FY 2019 – 20 in the current account deficit.
The current account deficit of the country shrunk by 72% during the sevenmonths of the financial year 2019-20, mainly on the back of lower importsof goods and improving inflows of remittances.
According to the State Bank of Pakistan, the current account deficit hasdecreased to $2.65 billion in the period of July to January from $9.47billion reported in the same period of the last year.
This happened as the trade deficit of goods decreased to $11.6 billion inthe said period from $18.3 billion of the comparable period. The drop inimports maintained lower trade deficit, however, the exports receiptsfailed to sustain their growth in the recent months despite easy loanfacilities.
The balance of trade in services also reduced to $1.97 billion from $2.37billion of the last year.
On the other hand, remittances inflow showed a steady growth to stand at$13.3 billion in seven months of FY20 as compared to $12.7 billion recordedin the corresponding period of FY19.
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The imports of the country slowed down right from the beginning of thecurrent financial year, however, the central bank restored 50% advancepayment facility for the import of machinery, plants and raw material inareDecember and up to 100% in January.
The imports are likely to increase in the upcoming months whereas theexports may remain subdued. Remittances may continue their steady growthand reflect positively on the current account position in the next fivemonths of FY20.
These macro-economic factors may contain the deficit of the current accountin the remaining period of the financial year.
Besides the stability in the current account, the country’s recordedimprovement in the fiscal deficit, forex reserves, and Rupee and Dollarexchange rate.
