ISLAMABAD - The government is looking for new adviser or minister of state to run the economic affairs of the country, which is heading towards balance of payment issue.

Prime Minister Shahid Khaqan Abbasi is likely to run the finance portfolio himself after granting indefinite leave to Ishaq Dar, who is receiving treatment in London for a heart condition. “Prime Minister House has taken all the record of finance minister other day, which is clearly indicating that he will run the affairs of the ministry,” said an official wishing not to be named.

The government would have to appoint the minister of state or adviser to the prime minister on economic affairs in case Abbasi run the economic affairs. The government is considering the names of Dr Miftah Ismail, who is currently working as Special Assistant to the Prime Minister on Economic Affairs and Federal Parliamentary Secretary for Finance Rana Muhammad Afzal for the slot of the minister of state. Similarly, the government could also appoint an economic adviser.

The PML-N has another economic wizard, Sartaj Aziz, in the party. Aziz is currently working as Planning Commission of Pakistan deputy chairman. He has vast economic experience. However, it would depend on party leadership to give Aziz, ministry of finance or not. Meanwhile, changes in economic team especially in Federal Board of Revenue (FBR) is also on the card. FBR Chairman Tariq Pasha had worked with Dar very closely and was considered his close associate. Pasha is likely to be replaced as the new adviser would consider his own team, sources added.

The new finance adviser or minister of state would face several economic challenges, which includes depleting foreign exchange reserves and widening of current account deficit due to increase in imports and continuous decline in exports and foreign remittances. Pakistan continued to face serious deterioration in its balance of payment situation during the last fiscal year FY17 as the country has to suffer current account deficit of $12 billion in the backdrop of rising import bill and disappointing export performance. The reserves are pressure due to widening of current account deficit, which surged by 122 percent to $5.013 billion in the first four months (July-October) of the current fiscal year as compared to $2.259 billion of a year ago. The CAD is widening as higher imports growth offset the improvement in exports.

The current account deficit is likely to touch $18 billion by the end of current fiscal year, which would further pressurise the reserve. Pakistan’s foreign exchange reserves had dropped by over $4.5 billion in the past one year due to fast drying up of foreign currency inflows. Pakistan’s official foreign exchange reserves of the State Bank of Pakistan (SBP) are $13.5 billion. The reserves would remain under pressure, as the government would have to pay $5.8 billion for foreign debt servicing in the current fiscal year 2017-18.

Pakistan is all set to generate up to $3 billion by issuing euro and sukuk bonds in international debt market to sustain depleting foreign exchange reserves. The government’s plans to raise loans from the international market by issuing bonds would support the foreign exchange reserves, which are under pressure due to widening trade deficit.