Current account gap swells beyond $2.17b in 3 quarters

The country’s current account deficit widened to $ 2.173 billion during three quarters of the current fiscal year, July-March FY14, reported the central bank on Thursday.

Compared to $ 1.255 billion or 0.71 percent of the corresponding period of FY13, the current account gap increased to 1.2 percent of the country’s Gross Domestic Product (GDP).

A quarterly analysis, however, shows that the quarter under review was relatively better than the two previous quarters. Compared to $ 1.206 billion of July-SeptFY14 and $ 551 million of Oct-DecFY14 the Jan-MarchFY14 witnessed a deficit of $ 416 million.

Major attributable factors for increase in the current account appear to be a huge deficit in the balance of trade in goods and services and the debt servicing against the country’s huge foreign financial obligations.

While the balance of trade in goods set in red zone at $ 12.081 billion against $ 11.585 billion of FY13, the trade deficit on services front widened to $ 2.035 billion compared to $ 782 million of last corresponding period.

During the three fiscal quarters, the country exported goods worth $ 18.930 billion ($18.346 billion in FY13) while its imports stood higher at $ 31.011 billion (($29.931 billion in FY13).

The services trade saw the exports accumulating to $ 3.722 billion ($ 5.432 billion in FY13) and imports totaling at $ 5.757 billion ($ 6.214 billion in FY13).

Overall, the country’s trade balance in goods and services widened to $ 14.116 billion from last year’s $ 12.367 billion.

During the review period, the heavily-indebted country repaid its international lenders $ 2.221 billion, $ 473 million more than $ 1.748 billion it had repaid in July-MarchFY13.

Foreign inflows seem to have been improving as the disbursements by the country’s international financers during the said period accounted for $ 1.980 billion as against $ 1.905 billion of FY13. The increase appears to be because of increasing short term loans that were counted at $ 618 million compared to $ 256 million the country had received last year.

The dollar-hungry country’s receipts under the head of long-term loans shrank to $ 1.362 billion from $ 1.649 billion.

The worker remittances kept a northward trend and surged to $ 11.583 billion during the three quarters compared to last year’s $ 10.354 billion. With economic managers expecting foreign inflows on account of $ 2 billion Eurobonds issue and 3G/4G auctions to ally the country’s troubled balance of payment woes, the State Bank Thursday reported that the country’s foreign exchange reserves stood at $ 9.84 billion up to April 11.

It counted its own dollar reserves $4.984 billion, up by $41 million compared to $4.943 billion it held last week while the banks were holding $ 4.86 billion.