Pakistani July-March c/a deficit narrows 68pc

KARACHI: Pakistan's current account deficit in the first nine months of the 2009/10 fiscal year was a provisional $2.702 billion, the central bank said on Monday.

That compared with a deficit of $8.379 billion in the same period last year, the State Bank of Pakistan said.

"Higher export receipts were the key reason behind the narrowing of the current account deficit," said Asif Qureshi, director at Invisor Securities Ltd.

The trade deficit for the July to March period of the 2009/10 fiscal year was $10.92 billion compared with $12.74 billion in the same period last year.

Pakistan recorded a provisional current account deficit of $40 million in March compared with a provisional $50 million in February.

In a quarterly report on the economy released last month, the central bank lowered its forecast for the 2009/10 current account deficit to 3.2-3.8 percent of gross domestic product, from previous estimates of 3.7-4.7 percent.

Analysts, however, said there could be some widening in the current account deficit.

"The current trend may not be sustained for long if oil prices continue to hold above $80, so we may see some deficit widening in coming months," said Qureshi.

An International Monetary Fund (IMF) emergency loan package of $7.6 billion agreed in November 2008 helped avert a balance of payments crisis and shore up reserves.

The IMF increased the loan to $11.3 billion in July and the central bank received a fourth tranche of $1.2 billion on Dec. 28.

The IMF has assured Pakistan it will approve the release of the next tranche at a board meeting on May 3, the country's prime minister's office said last week. The next tranche is of $1.2 billion.