Pakistan current account deficit narrows by 47pc in 4MFY23

Current Account Deficit (CAD) of Pakistan narrowed by 47 per cent in first four months (July – October) of fiscal year 2022-2023 (4MFY23), according to Balance of Payment (BoP) details released by State Bank of Pakistan (SBP) on Monday.

The CAD contracted to $2.82 billion during first four months of the current fiscal year as compared with the deficit of $5.31 billion in the corresponding months of the last fiscal year.

Contraction in current account deficit may be attributed in significant fall in import bill of the country, which resulted in narrowing the trade deficit.

The import bill of the country fell by 16 per cent to $21.09 billion during first four months of the current fiscal year as compared with $25.08 billion in the same period of the last fiscal year.

On the other hand exports recorded a nominal growth of one per cent to $9.56 billion during the period under review as compared with $9.46 billion in the same period of the last fiscal year.

This resulted in contraction of trade deficit by 26 per cent to $11.53 billion during July – October 2022 when compared with $15.62 billion in the same period of the last fiscal year.

However, inflows of remittances declined by 8.6 per cent to $9.9 billion during first four months of the current fiscal year. The inflow of remittances has been recorded at $9.9 billion during July – October of current fiscal year 2022/2023 as compared with $10.83 billion in the corresponding period of the last fiscal year.

The current account deficit in the month of October 2022 recorded at $547 million, which is widened compared with the deficit of $363 in September 2022. However, it was narrowed with compared with $1.78 billion in October 2021.

The CAD sharply widened to $17.41 billion in the fiscal year 2021/2022 from $2.82 billion in fiscal year 2020/2021.