Current account deficit down by 80 percent to $527 million in July-August

[Naveed Yaseen]

KARACHI (September 18 2009): The country's current account deficit dipped by 80 percent during the first two months of current fiscal year, mainly due to heavy home remittances sent by expatriate Pakistanis and decline in trade deficit. The State Bank of Pakistan said on Thursday that country's current account deficit declined by 2.149 billion dollars to 527 million dollars during July-August as compared to 2.676 billion dollars during the corresponding period of last fiscal year.

"Decrease in current account deficit has been contributed by rising home remittances with the SBP and the ministry of overseas Pakistani's efforts, decline in imports and trade deficit, besides rising services sector exports," analysts said. They said current trend of balance of payment would help save the country's forex reserves, which had declined to six billion dollars in November last due to a massive current account deficit.

While, the rising remittances and services exports would also provide new avenues for the foreign exchange to build country's forex reserves at a strong level. Statistics indicated that during the first two months of current fiscal the country faced 1.983 billion dollars deficit in trade, 525 million dollars in services and some 442 million dollars deficit in income.

While, overall deficit including trade, services and income stood at 2.95 billion dollars against current account transfers of 2.432 billion dollars in July-August of current fiscal. The combined deficit is some 35 percent lower than that of the same period of last fiscal year, in which accumulated deficit of trade, services and income stood at 4.507 billion dollars relative to 2.95 billion dollars in July-August.

During July-August country's altogether income from abroad stood 74 million dollars as compared to 516 million dollars payments of income to the overseas. In addition, services sector trade imports declined to 1.043 billion dollars as against the imports of 518 million dollars in service trade.

In addition goods exports stood at 3.036 billion over the imports of 5.019 billion dollars during the first two months. Statistics show current account deficit with out official transfers declined to 529 million dollars in first two months of current fiscal relative to 2.737 billion dollars in same period of fiscal year 2008-2009.

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