Karachi, February 20, 2024 – The Research Team of Topline Securities released the latest Key Economic Indicators for Pakistan on Tuesday, shedding light on various aspects of the country’s economic landscape.
One notable development is the reversal of Pakistan’s current account, which turned negative in January 2024. After registering a Current Account Surplus (CAS) of US$404 million in December 2023, the country reported a Current Account Deficit (CAD) of US$269 million for the first month of the new year. The cumulative CAD for the first seven months of FY24 stands at US$1,093 million, a significant decrease from the US$3,896 million recorded during the same period in FY23.
Remittances, a crucial component of Pakistan’s external finances, experienced a 1% month-on-month increase in January 2024, reaching US$2.4 billion. However, on a year-on-year basis, remittances for the first seven months of FY24 amount to US$15.8 billion, reflecting a 3% decline compared to the corresponding period in the previous fiscal year.
The foreign exchange reserves of Pakistan witnessed a 5% month-on-month rise in January 2024, reaching US$13.2 billion. While this is a positive development, it is noteworthy that the reserves held by the State Bank of Pakistan (SBP) remained flat at US$8.2 billion during the same period.
On the fiscal front, the Budget Deficit for the second quarter of FY24 amounted to Rs1.4 trillion, a notable increase from Rs875 billion recorded in the second quarter of FY23. This brings the cumulative Budget Deficit for the first half of FY24 to Rs2.4 trillion, up from Rs1.7 trillion in the corresponding period of the previous fiscal year.
Inflation remains a key concern for Pakistan, with the Consumer Price Index (CPI) indicating a year-on-year inflation rate of 28.34% in January 2024, a slight decrease from the 29.66% reported in December 2023. The moderation in inflation is attributed to an increase in food prices and electricity charges. However, on a month-on-month basis, CPI inflation increased by 1.8% in January 2024, higher than the 0.8% increase observed in December 2023. The average inflation for the first seven months of FY24 stands at 28.73%, compared to 25.40% in the same period of FY23.
The economic indicators provide a comprehensive overview of Pakistan’s economic performance, highlighting both positive and challenging aspects. Policymakers, investors, and stakeholders will closely monitor these indicators to assess the economic trajectory and formulate strategies to address the challenges and capitalize on opportunities for sustainable growth.
