Pakistan’s current account deficit has witnessed a significant reduction of 76 percent during the first ten months of the current fiscal year 2022-2023, according to the State Bank of Pakistan (SBP).
The latest statistics released on Tuesday reveal that the deficit contracted to $3.26 billion from $13.65 billion during the corresponding period of the previous fiscal year.
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This notable decline in the current account deficit can be attributed to a substantial 28 percent decrease in imports throughout the reviewed period. Pakistan’s import bill for the initial ten months of the current fiscal year stood at $46.89 billion, a notable drop from $65.52 billion in the same months of the previous fiscal year.
However, the decline in imports also impacted the country’s exports, which experienced a 12 percent decrease to $23.17 billion during July to April 2022-2023, compared to $26.25 billion in the corresponding period of the last fiscal year.
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Nonetheless, this decline in imports and exports led to a 40 percent reduction in the trade deficit. Pakistan’s trade deficit for the first ten months of the current fiscal year decreased to $23.71 billion, a substantial improvement from the trade deficit of $39.27 billion in the same months of the previous fiscal year.
On the other hand, the inflow of home remittances recorded a 13% decline during the ten-month period from July to April 2022-2023, amounting to $22.74 billion compared to $26.14 billion in the same period of the previous fiscal year.
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April 2023 marked the second consecutive month in which Pakistan recorded a current account surplus. The month under review witnessed a surplus of $18 million, following a surplus of $750 million in March 2023.
These positive developments in narrowing the current account deficit hold significant importance for Pakistan, which has been grappling with a substantial balance of payment crisis in recent years, particularly due to a shortage of dollars. The contraction in the current account deficit is expected to contribute to an improvement in the country’s economic indicators for the ongoing fiscal year.
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