Current Account deficit crosses $2 billion in July-Nov FY12

KARACHI: The current account deficit has exceeded $2 billion in five months of the current year 2011-12 on the swelling trade deficit and shrinking inflows of foreign exchange in country’s reserves.

The State Bank of Pakistan (SBP) statistics showed the current account balance has continued to show its negative growth, standing at $2.104 billion in Jul-Nov with 72 percent increase from the balance position of previous year.

The current account deficit in November up 66.5 percent to $478 million from previous month of October. The trade deficit increased sharply by $8.99 billion or 48.7 percent in the first five months of the current fiscal year.

On the other hand, the higher imports of petroleum products and power machineries have increased the import bill of the country.

The cumulative figure shows Pakistan’s exports during July-November 2011-12 increased to a record $9.434 billion, while in the corresponding period of last year 2010-11 exports were $8.959 billion, which shows 5 percent growth.

The imports of different products during July-November 2011-12 posted $18.424 billion as compared to $15.404 billion during the same period of the year 2010-11, registering a 20 percent growth.

Besides Foreign Direct Investment (FDI) continued its lackluster trend of couple of years as investors are reluctant to bring their money in Pakistan for business and capital markets. Therefore foreign exchange reserves have been under pressure for past couple of months, standing at $16.9 billion at present.

Pakistan’s overseas workers’ support has maintained the growth of the remittances volume and inflows of foreign exchange, as the an amount of $5,239.99 million were remitted in July-November of current fiscal year 2011-12 with an impressive growth of 18.33 percent from previous year.

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