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As Political Discord Hits Pakistan, Economic Challenges Loom

  • Current account quarterly gap widens to over four decade high
  • Improvements not expected until after 2018 vote: strategist
An under construction tower stands in Karachi, Pakistan.

An under construction tower stands in Karachi, Pakistan.

Photographer: Asim Hafeez/Bloomberg
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Along with political turmoil, Pakistan faces economic headwinds ahead of a national vote next year with achievements made under a three-year International Monetary Fund loan program starting to fade.

The government is now more focused on handling the fallout from the disqualification of Nawaz Sharif as prime minister in July and U.S. President Donald Trump’s comments last month on Pakistan’s alleged harboring of terrorist groups. Yet looming in the background is a potential economic slump. The current account gap has more than tripled to $4.3 billion in the quarter ended June, the worst level in more than four decades, according to data compiled by Bloomberg. The central bank’s foreign exchange reserves have declined by a quarter since an October peak.