Pakistan current account deficit (CAD) widened by 42 per cent in the first month (July) of the fiscal year 2022/2023 as compared with the same month of the last fiscal year, according to data released by the central bank on Wednesday.
According to the Balance of Payment (BoP) data issued by the State Bank of Pakistan (SBP), the current account deficit ballooned to $1.21 billion in July 2022 as compared with the deficit of $851 million in the same month of last year.
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However, the current account deficit narrowed in July 2022 when compared with the previous month. The current account deficit was recorded at $2.19 billion in June 2022.
Analysts at Arif Habib Limited said that the country posted current account deficit of $1.2 billion for the month of July 2022 compared to a deficit of $851 million during July 2021, up 42 per cent YoY.
On a YoY basis, the primary reason behind the deficit was an 8 per cent YoY decline in remittances along with a 0.4 per cent YoY increase in total imports to $6.2 billion.
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However, total exports increased by 4 per cent YoY during July 2022. On a MoM basis, CAD was significantly down (by 45 per cent) aided by a 27 per cent decline in Balance of Trade.
Workers’ remittances too posted a decline on MoM basis, down 9 per cent.
READ MORE: Current account deficit swells to $13.78 bn in 10 months
To recall, SBP had mentioned in its latest MPS that lower (MoM) imports on account of a decline in energy imports as well as non-energy imports, improved the current account position in July 2022. Albeit, exports too showed a decline on a MoM basis amid Eid Holidays and “emerging signs of slower global demand.”
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