History of BOP in Pakistan

History of BOT in Pakistan

There is almost trade deficit except at three places during the last 50 years; 1947-48 1950-51 1972-73

History of BOT in Pakistan

1947-48 ( The reason for surplus in 1947-48 was that the exports of the newly Pakistan were quite high and non-devaluation decision) 1950-51 (With the Korean War boom once again Pakistan gained a surplus in BOT.) 1972-73 (there is a favorable BOT (US $ 20 million) The exports increased significantly and the share of exports in GDP rose to 14.9%.)

History of BOP in Pakistan

There is almost deficit bop except during following years; 1950-51 1954-55 1955-56 1958-59 1959-60

History of BOP in Pakistan

Fiscal Year 1950-51 1954-55 1955-56 Situation Favourable Favourable Favourable Reason Due to the Korean War (Rs. 578.0 Crore) Due to Devaluation and restrictions on imports (Rs. 09.9 Crore) Due to 20% increase in exports

1958-59
1959-60

Favourable
Favourable

Bonus Vouchers Scheme Restrictions on Imports Bonus Vouchers Scheme Restrictions on Imports

and
and

History of BOP in Pakistan

1965-66 Unfavourable Deficit due to war against India 2007-08 Unfavourable Deficit ($ 16.8 billion)

2008-09

Unfavourable

Deficit ($ 12.72 billion)

2009-10

Unfavourable

Deficit ($ 10.945 billion)

2010-11

Unfavourable

Deficit ($ 8.3 billion)

Current situation of BOP

The balance of payment posted a $3.3 billion deficit in FY12 compared to a surplus of $2.5 billion in FY11, marking a negative growth of 31 per cent. This was mainly on account of a 24 per cent YoY jump in current account deficit, led by a huge trade deficit of $18.4 billion.

According to financial experts, with clouds of deficits hovering over, remittances turned out to be a silver lining, which marked an uptick of 18 per cent YoY amounting to $13.2 billion in FY12.

Future of BOP
In FY13, fluctuating oil prices will remain a threat to the widening trade deficit, hence further widening the current account deficit. Also, it is expected that the FDI would remain weak due to bleak law and order situation and political uncertainty; therefore heavy dependency exists on external aid (much-awaited Coalition Support Funds of $1.2 billion and other payments) and remittances to finance the current account deficit. Another factor that will exert pressure on the balance of payments, reserves in particular, would be external debt repayments, including repayments to IMF of $3b. Thus, it is clear that the external account to continue to deteriorate in FY13.