Leading Issues in the Economy of Pakistan: Agenda for Reforms ii) The annual external debt repayment has trebled since 2014-15. It was$4 billion in 2014-15, which increased to$12 billion in 2021-22. It is projected at over$14 billion in 2022-23, net of rollovers. This deterioration is primarily the consequence of large current account deficit as% of the GDP. During the last seven years, the average current account deficit has been 3.5 percent of the GDP. The peak year was 2017-18 when it rose to 6.4 percent of the GDP. In 2021-22 it was also relatively high at 4.6 percent of the GDP. Cumulatively, the current account deficit over the period, 2014-15 to 2021-22, is$75.4 billion. This has been financed to the extent of$65 billion by buildup of external debt. The main factor contributing to the large current account deficit is the rising trend in the trade deficit in goods as a percentage of the GDP, as shown in Table 15.1. It was small at 2.1 percent of the GDP in 2000-01. By 2021-22, it has risen almost six times to over 12 percent of the GDP. Fortunately, home remittances have made an increasing contribution to financing the trade deficit. Table 15.1: Trend in Exports, Imports and Trade Deficit as% of GDP (% of GDP) Years Exports Imports Trade Deficit Home Current Account Remittances Deficit 2000-01 12.9 15.1-2.1 1.5-0.7 2005-06 12.0 22.5-9.5 2.9-4.5 2010-11 11.6 18.9-7.3 5.2+0.1 2015-16 6.6 14.2-7.6 6.3-1.6 2016-17 6.0 15.6-9.6 5.7-3.6 2017-18 6.5 17.0-10.5 5.6-5.4 2018-19 7.1 17.0-9.9 6.8-4.2 2019-20 7.1 14.8-7.7 7.7-1.5 2020-21 7.3 16.2-8.9 8.5-0.8 2021-22 9.9 22.0-12.1 8.0-4.6 Source: PES There has been a continuing decline in the level of exports as a percentage of the GDP. In 2000-01 they were at almost 13 percent of the GDP, but have since declined virtually every year to come down close to 7 percent of the GDP by 2020-21. Fortunately, there was improvement to 10 percent of the GDP in 2021-22. Imports, on the other hand, have shown a rising trend as percentage of the GDP, from 15 percent of the GDP in 2000-01 to 22 percent of the GDP in 2021-22. The average trade deficit over the last seven years has been as high as 9.5 percent of the GDP. 142