ISLAMABAD    -   Prime Minister Imran Khan on Saturday said it was a great achievement of his economic team to turn around the national economy within a year.

In a tweet, the prime minister said that foreign direct investment (FDI) witnessed an increase of 111.5 percent while foreign private investment surged by 194 percent during this period.

While explaining the economic team’s achievements with facts and figures, the prime minister said that current account deficit has gone down by 80 percent during the corresponding period while the remittances have increased by 17.6 percent.

Similarly, exports registered an increase of 5.9 percent over the last year while imports decreased by 18.6 percent.

In a related development, latest data for first quarter of current fiscal year released by the State Bank of Pakistan (SBP) on Friday showed the country’s current account deficit (cad) in the first quarter of current fiscal year declined by a huge 64 percent mainly on the back of a 21pc reduction in the imports bill.

SBP’s data showed the current account deficit for July-September FY20 clocked in at $1.548 billion compared to $4.287b in the same period last fiscal year; a decline of $2.739b.

The reduced current account deficit is a positive omen for the government, which is struggling with slow economic growth and high inflation. However, despite massive decline in rupee’s value, the country’s exports have failed to register any noticeable increase during the period.

The data showed the large decline in imports was the real force behind the 64pc reduction in the deficit whereas, exports of goods and services during the quarter increased by a meagre 1.38pc or $99 million. The exports services during the quarter clocked in at $7.259b compared to $7.160b in the same period last fiscal year.

Contrary to exports, the country’s imports fell by 19pc to $13.461b. On one hand, this massive decline has helped government reduce the current account deficit, whereas on the other, it has also slowed down the overall economic activity in the country.

Furthermore, with a lacklustre increase in exports, the government may find it difficult to meet the current account deficit. The government was successful in bringing down the deficit from a historic high of $19.897b in FY18 to $13.830b in FY19.

The government has been facing major challenge in the form of controlling the huge debt servicing, which makes up for the major chunk of current account deficit. In FY19, the current account deficit was $13.8b whereas the debt servicing, in the same fiscal year, was $11.588b.

In the ongoing fiscal year, the government has borrowed additional funds from the donors, commercial banks and friendly countries, which would certainly increase the total size of debt servicing.

The debt servicing increased by 54pc in FY19 compared to previous year reflecting the size and cost of commercial borrowings. The debt servicing in FY18 was at $7.495b.

In FY20, the government has borrowed from the International Monetary Fund, the World Bank, the Asian Development Bank, commercial banks and other sources to meet the current account deficit, which could not be met despite overseas Pakistanis sending over $20bn in remittances each year.