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KARACHI: Pakistan’s current account deficit widened to a provisional $305 million in January 2012, compared with an $118 million shortfall in January 2011, the central bank said on Friday.

The current account recorded a provisional deficit of $2.633 billion in the first seven months of the 2011/12 fiscal year, compared with a deficit of $96 million in the same period last year, according to data from the State Bank of Pakistan.

“The situation obviously is not looking up and Pakistan is certainly not headed in the right direction. At the same time, there doesn’t seem to be any urgency on part of the authorities to have a strategy on financing the external accounts,” said Asif Qureshi, director at Optimus Capital Management Ltd.

Key points

The trade deficit widened to $9.057 billion in the first seven months of the 2011/12 fiscal year, compared with $6.531 billion in the same period last year. The trade deficit was $1.292 billion in January 2012.

Pakistan uses US dollars to pay for its oil imports, which make up about 40 per cent of the total import bill.

International oil prices were near $120 on Friday and concerns about potential supply disruptions and optimism over Greece has made oil a star performer this week, with US crude eyeing its biggest weekly gain since late December and Brent headed for its fourth consecutive weekly rise.

“The trade deficit is increasing at a faster pace than the increase in remittances and is expected to widen further, as last year Pakistan got some cushion because of higher cotton prices,” said Khalid Iqbal Siddiqui, Research Head at United Bank Ltd.