ISLAMABAD – Positive economic development worth $5.1 billion for PTIgovernment in FY 2019-20.
Pakistan’s current account deficit has registered a sharp 75 percentdecline in the first half of this fiscal year (FY20), mainly due to thetrade deficit, which went down by 30.26% to $11.6 billion as compared to$16.7 billion last fiscal year.
According to the State Bank of Pakistan (SBP), the current account deficitnarrowed down 75 percent to $2.153 billion in July-Dec of FY20. The deficitwas $8.61 billion in the corresponding period of the previous fiscal year.
Comparing on a yearly basis for December, the deficit plunged 81% to $367million for December 2019 compared to $1.88 billion in December 2018. Thedecrease was due to 20% YoY fall in total imports along with a 6% rise inexports.
According to analysts, improvement in goods trade deficit along with growthin exports has resulted in a massive reduction in the current accountdeficit this fiscal year. The major reason for the fall in the currentaccount deficit was the sharp decline in the import bill.
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”We need to use the current surplus as a cushion and shift focus onexports. Rising exports is the sole solution to our economic conundrum,”said Ossama Rizvi, an economic and geopolitical analyst.
The collective deficit of goods trade, services, and income stood at$14.732 billion in the first half of the current fiscal year versus $21billion in the same period last fiscal year.
During the period under review, the deficit of the services sectordecreased from $2.176 billion to $1.795 billion. The income sector’sdeficit stood at $3.12 billion with $322 million inflows and $3.441 billionoutflows. SBP believes that the current account balance is expected toimprove due to more-than-expected contraction in imports.
