The country’s current account deficit has further declined in July-September 2015-16 shrinking deficit to only $109 million or 93 percent compared to negative $1.631 billion in the same period last year.
The current data released by the State Bank of Pakistan (SBP) on Monday said that in the month of September 2015 current account was in surplus to $306 million which was stood at negative $240 million in August 2015.
The reserves of the country stood at above $20 billion with the help of International Monetary Fund (IMF) as per claim of Ishaq Dar, chief of the finance ministry. The reserves of the SBP stood at above $15.286 billion July-September this year after rising 69.5 percent from $9.017 billion in the same period last year.
The country gross domestic product (GDP) has further risen to $74.530 billion in three of current fiscal year compared to $68.057 billion stood in the same period last year.
The trade deficit declined to negative $4,522 billion owing to the declining export in July-September 2015-16. The export of the country stood at $5.421 billion against total import of $9.943 billion.
The country’s imports also witnessed a decline of 8.84 percent in September 2015 over previous month after country imported goods worth $3.48 billion in September compared to $3.82 billion during August 2015.
The country received total remittances of $4.967 billion in first quarter compared to $4.775 billion in the same quarter 2014-15. Services exports of the country declined to $1,582 billion in the first three month compared to $1.744 billion in the same period last year. The service balance deficit stood at negative $155 million in first quarter this year.
The deficit is the second major negative indicator after the foreign direct investment which fell in July-September quarter of the current fiscal year. According to the SBP, the country has received foreign direct investment (FDI) of $216.2 million in first three-month of current fiscal year, which is up by 7.7 percent compared to $200.7 million received in same period last year. Despite the efforts, the government has failed to improve its exports, but the economic managers said due to low international goods prices reduced the export proceeds.
Last week, the government has imposed duties on the import of different kinds of textile items from India and other neighbouring countries to boost the local exports of the textile goods. Otherwise the imports of such items were hurting our textile exports, the APTMA official said.
The analyst said that despite rising foreign exchange reserves and growth in remittances the current account deficit could not help to bring the current account deficit at zero level in this quarter. However, the month of September was good for the country where the country recorded balance of payment in surplus.
The government believes that situation would change next fiscal year as it expects huge investment under the $45 billion MoUs signed with China, mainly in the power sector.
Experts further said that the friendship with Russia would also boost their economy as it signed a LNG pipeline deal with Pakistan which would be completed in 2017.