ISLAMABAD: State Bank of Pakistan (SBP) Governor Jameel Ahmed has said the current account deficit is projected at $7 billion for the ongoing fiscal year against the budgetary target of $10 billion after measures taken to control imports.
During a briefing to the Senate Standing Committee on Finance presided over by Senator Saleem Mandviwalla, the governor said import compression would be eased after the completion of the International Monetary Fund (IMF) review because this policy cannot continue for a more extended period.
He said the low inflows due to the delay in the IMF review, higher commodity prices in the international market and the Ukraine-Russia war are significant reasons behind the pressure on the external account and an increase in inflation. However, he added that an increase of 300 percent basis points in the policy rate was not made on the demand of the International Monetary Fund (IMF), adding that Staff Level Agreement (SLA) is close to be finalised with the Fund.

Ahmed further stated there was an outflow of $2.4 billion on account of debt repayment in the first half of the current fiscal year compared to $6.3 billion inflow for the same period a year ago. He said that the decline in inflows was due to the pending review of the IMF programme and hopefully budgeted inflow would materialise after the completion of the review in the second half, thereby, increasing foreign exchange reserves.

He said that the pressure of inflation will remain for two to three months and the average inflation this year will be 26.5 percent, the SBP governor added. He said that so far, remittances have decreased by $2 billion and are projected at $29 billion for the ongoing fiscal year against over $31 billion for the last fiscal year.