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Economy
In reply to the discussion: STOCK MARKET WATCH -- Monday, 30 January 2012 [View all]xchrom
(108,903 posts)79. Pakistan central bank issues deficit warning
http://www.atimes.com/atimes/South_Asia/NA31Df01.html
KARACHI - Pakistan's fast-growing current account deficit is moving the country ever closer to a repeat of the 2008 financial crisis that led to a request for an International Monetary Fund (IMF) bailout, with repayment of that rescue set to exacerbate its present dire situation.
The State Bank of Pakistan (SBP), in its first quarterly report for the fiscal year 2012 issued at the weekend, said financial flows had almost dried up. The central bank is particularly concerned about the pace at which the current account has deteriorated.
The deficit widened to $2.154 billion in the first six months of the current fiscal year, compared with a surplus of $8 million in the same period last year. A weakening current account is adding to
pressure on the rupee, which has fallen to a record low of 90 to the US dollar.
The SBP said Pakistan was likely to miss its 4.2% target for gross domestic product (GDP) growth in the 12 months through June because of energy shortages, high oil prices and a decline in global prices for agricultural commodities.
A continuing high import bill for oil purchases will make it difficult to reduce the current account in the coming months, putting pressure on foreign exchange reserves as Islamabad, with no additional sources of revenue, starts repaying $8 billion to the IMF in March.
KARACHI - Pakistan's fast-growing current account deficit is moving the country ever closer to a repeat of the 2008 financial crisis that led to a request for an International Monetary Fund (IMF) bailout, with repayment of that rescue set to exacerbate its present dire situation.
The State Bank of Pakistan (SBP), in its first quarterly report for the fiscal year 2012 issued at the weekend, said financial flows had almost dried up. The central bank is particularly concerned about the pace at which the current account has deteriorated.
The deficit widened to $2.154 billion in the first six months of the current fiscal year, compared with a surplus of $8 million in the same period last year. A weakening current account is adding to
pressure on the rupee, which has fallen to a record low of 90 to the US dollar.
The SBP said Pakistan was likely to miss its 4.2% target for gross domestic product (GDP) growth in the 12 months through June because of energy shortages, high oil prices and a decline in global prices for agricultural commodities.
A continuing high import bill for oil purchases will make it difficult to reduce the current account in the coming months, putting pressure on foreign exchange reserves as Islamabad, with no additional sources of revenue, starts repaying $8 billion to the IMF in March.
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