Increased imports behind Pakistan’s deficit, says finance minister

25 Aug 17

The recent increase in Pakistan’s current account deficit was largely driven by a sharp increase in imports of machinery for power generation, textile construction and import of petroleum products, finance secretary Mohammad Pervaiz Malik has told a meeting of senior officials.

He said that these imports were worthwhile as they would increase the economy’s production capacity and enable higher growth and export rates in future.

Pakistan’s finance ministry said in a report of the meeting that Malik attributed the country’s decline in exports in the past few years to global economic conditions, energy shortages in industrial and agriculture sectors, and reduced availability of exportable surpluses.

This has begun to turn round, in particular through more reliable power supplies, with a 0.52% increase in exports in the first half of 2017 against the same period a year earlier.

Remittances from Pakistanis working overseas, an important source of foreign exchange for the country, had been stagnant for some years but grew by 16% between July 2016 and 2017.

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