Karachi, May 17, 2024 – Pakistan’s current account deficit has significantly narrowed to $202 million in the first 10 months (July-April) of the fiscal year 2023-24, a substantial improvement from the $3.92 billion deficit recorded in the corresponding period of the previous fiscal year, according to data released by State Bank of Pakistan (SBP) on Friday.
This sharp decline is largely attributed to the surpluses recorded in March and April 2024. In April, the current account surplus was $471 million, while in March it stood at $434 million. These monthly surpluses have been instrumental in reducing the overall deficit.
A key factor in the narrowing current account deficit is the considerable reduction in the trade deficit. According to the Pakistan Bureau of Statistics (PBS), the trade deficit for the period from July to April 2023-24 was $19.64 billion, compared to $23.53 billion during the same period last fiscal year. This improvement is primarily due to a 9.10% surge in exports and a 4% decline in imports.
Pakistan’s export sector has shown robust growth, reaching $25.28 billion in the first 10 months of FY24, up from $23.17 billion in the previous fiscal year. This increase can be attributed to strategic pricing adjustments and successful market expansion initiatives that have enhanced the country’s export competitiveness.
On the import side, the decline has been driven by various measures implemented to curb non-essential imports, thereby reducing the overall import bill. This strategic approach has played a crucial role in balancing the trade equation and improving the current account balance.
In addition to trade performance, the inflow of workers’ remittances has also supported the external sector’s strength. Remittances increased to $23.85 billion during the first 10 months of FY24, up from $23.04 billion in the same period of the previous fiscal year. This rise in remittances has provided a steady source of foreign exchange, contributing to the overall improvement in the current account balance.
The significant narrowing of the current account deficit is a positive indicator of Pakistan’s economic recovery and stability. It reflects the impact of concerted efforts to boost exports, manage imports, and enhance remittance inflows. As the country continues to implement policies aimed at sustaining this positive trend, the economic outlook remains optimistic.
Overall, the reduction in the current account deficit underscores the effectiveness of Pakistan’s economic strategies and highlights the resilience of its external sector. With continued focus on maintaining and improving these trends, Pakistan is poised to achieve greater economic stability and growth in the coming months.