Karachi: According to a latest data released by State Bank of Pakistan (SBP), the current account deficit of the country rose to USD 1.209 bn in 1QFY12 against USD 0.597 bn in the corresponding period last year, depicting a significant rise of 102.5% on YoY.
According to Alfalah Securities Limited, rising trade deficit has been observed which has been a major contributor to the high current account deficit. The Trade deficit of the country witnessed a considerable rise of 34.9% as it stood at USD 4.037bn in 1QFY12 against USD 2.992 bn stood in the same period last year.
Meanwhile, the current account deficit was momentous in September 2011 as it reached to USD 908 mn when compared with USD 201 mn in August 2011, depicting a rise of 351.74% MoM. The rising current account deficit will add to the problems of the economy as there are fears that if the current scenario prevailed throughout FY12, the current account deficit would reach to USD 5 bn thus, it would put pressure on foreign exchange reserves and the local currency. The current account deficit has worsened at a time when the country is facing continuous foreign capital outflows and would further deteriorate when the repayment of loan to the IMF would commence in February 2012.