KARACHI - Pakistan's current account deficit has grown by 2.11 billion dollars during the five months of the current fiscal (Jul-Nov 2008) due to a sharp increase in imports and trade deficit. From July to Nov FY09 the current account deficit has widened to 6.855 billion dollars as against 4.745 billion dollars such deficit recorded in the corresponding period of FY08. However, in the month of November, current account deficit fell by 1.362 billion and amounted to 810 million dollars against 2.172 billion of last month this year (Oct 2008) on account of downward trend in trade deficit caused by global financial crisis, slowdown in international prices of commodities and the government's fiscal and administrative measures to decelerate imports. According to latest balance of payment report of the SBP, despite receiving attractive proceeds from workers' remittances in terms of current transfers and exports of 8.269 billion dollars, the current account remained into negative zone in first five months of this fiscal. The surge in the current account deficit observed during the period under review was compounded by a number of domestic and external reasons such as hike in import demand, unprecedented rise in global oil and other commodity prices and decrease in exports. Worth noting is that the trade deficit has enlarged by 20.27 per cent to 8.736 billion dollars during five months of current financial year (Jul-Nov) FY09 as compared to 7.264 billion dollars. During Jul-Nov FY09, the total imports surged by 16.47 per cent by reaching the level of US$ 17.06 billion from US$14.602 billion of last financial year. However, the overall exports registered a strong growth of 12.70 per cent as increased to US$ 8.269 billion against US$ 7.337 billion recorded in the five months of FY08. According to Sate Bank statistics on balance of payments, without off transfer the Current Account Deficit (CAD) amounted to $6.959 billion against U$4.778 during the period under review. In current transfer, remittances sent home by overseas Pakistanis amounted to $2,966.51 million in the first five months of the current fiscal year 2008-09, showing an increase of $ 379.44 million or 14.67 per cent over the same period of the last fiscal year. The amount of $2,966.51 million includes $0.32 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs). In financial account, the total inflow of foreign investment reached 1.44 billion dollars in five months of current FY09 against 1.818 billion dollars of same period of last FY08, showing a decline of 378 million dollars. The SBP report pointed out a minor decline of 6.4 per cent (109.1 million dollars) in the foreign direct investment during five months of current fiscal as total FDI amounted to 1.603 billion dollars from July to November FY09 against 1.712 billion dollars of corresponding period of last FY08. The external current account deficit is projected to narrow to $10.6 billion in FY09 (6.5 percent of GDP) mainly because of slower aggregate demand growth and lower oil import prices. At the same time, the surplus in the financial account would decline to $6.2 billion, as an increase in disbursements from IFIs (to about $4 billion) would be more than offset by weaker FDI and portfolio inflows as compared to 2007/08. Given the target to increase gross official reserves to $8.6 billion by end-June 2009 (the level prevailing at end-June 2008), the residual financing gap of $4.7 billion will be covered by drawing on IMF resources.