Current account deficit in January at record high of $2.55 billion
The Current Account Deficit increased to $11.579 billion in the seven month of current financial year, against a surplus of $1.028 billion in the same period last year
In January, Pakistan’s
current account deficit reached at record high of $2.55 billion. It is an
increase of 37.73% compare to December 2021. In December, current account
deficit was $ 1.86 billion. The current account deficit increased to $11.579
billion in the seven month of this fiscal year, against a surplus of $1.028
billion in the same period last year.
Analysts
said an all-time high current account deficit highlighted the country’s
reliance on foreign financing and the risk of more pressure on already battered
rupee. The surging imports continue to widen the trade deficit as the prices of
oil and other commodities including food continue to rise.
The Russian invasion of Ukraine is likely to
further push the prices of oil and wheat. The oil prices already crossed $103/barrel
on Ukraine crisis.
Imports of
goods jumped 55.1% to $42.843 billion in July-January FY2022, the State Bank of
Pakistan’s numbers showed. Exports increased 27.4% to $17.772 billion.
On
year-on-year basis, the primary reason behind the deficit was a 45% increase in
total imports to $7.3 billion and 5% decline in remittances. Analysts fear the
current account deficit could rise further in coming months on account of
higher global commodity prices, especially triggered by Russian military
aggression against Ukraine. “Based on this trend it will beat all earlier
estimates and may go to $16-18 billion (5-6% of GDP) looking at rising oil
prices.
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