Thirty years of chronic current account deficit 1972—2001: The case of Pakistan
摘要
Pakistan has been suffering from a chronic deficit in the current account for many decades. Current account deficit strengthens the foreign currency against the home currency which makes imports of good and services more expensive as compared to exports and causes devaluation of home currency. The main objective of this paper is to find out how the current account deficit is influenced by different economic factors. Our regression model’s estimated results indicate that the percentage change in the volume of imports, foreign direct investments and total consumption are positively correlated and, on the other hand, exports, workers remittance, growth in agriculture and manufacturing are negatively correlated with the current account balance of Pakistan during the observed period 1972-2001.