Karachi: The current account deficit (CAD) of Pakistan hiked by USD 2.95 billion compared with USD 194 million in the corresponding period of last year, registering a significant increase of 1421%, during 8MFY12 (Jul‐Feb) mainly due to rise in trade deficit and foreign inflows. The overall goods import stood at USD 26.77 billion and exports at USD 16.25 billion with trade deficit rising to USD 10.515 billion (higher by 43% YoY) during (Jul‐Feb) FY12.
According to Alfalah Securities Limited, on the other hand the net inflows of foreign investments also declined by 70.7% to USD 377.7 million during (Jul‐Feb) 8MFY12 against USD 1.28 billion in the same period last year. Total foreign private investment dipped by 68.3 % to USD 430 million. The foreign direct investment (FDI) has dropped by 46.6% to USD 558 million against USD 1.046 bn. Similarly, the foreign portfolio investment declined by 141% to the outflow of USD 128.2 million against the inflows of USD 311.8 million last year. The rising CAD would exert pressure on the foreign exchange reserves and is likely to result in steeper Pak Rupee devaluation.