Current account deficit narrows to $0.7bn

Pakistan’s current account deficit (CAD) fell to $0.7 billion in August, compared to $1.2bn in the previous month, the State Bank of Pakistan (SBP) said late on Wednesday night. This equates to a decline of 41.67 per cent month-on-month.

For the first two months of the current fiscal year, the current account deficit narrowed by $0.5bn to $1.9bn compared to the corresponding period in FY22, the central bank tweeted. This was primarily due to exports increasing by $0.5bn and imports declining by $0.2bn, it added.

SBP data showed the balance of trade in goods and services also declined by 0.54pc month-on-month to $3.98bn.

During August, imports of goods stood at $5.75bn, compared to $5.35bn in the preceding month. On the other hand, exports increased significantly to $2.81bn, jumping 23.38pc from $2.28bn in July.

Workers’ remittances clocked in at $2.72bn compared to $2.52bn in the previous month.

Pakistan posted a massive current account deficit of $17.3bn in the previous fiscal year, or a monthly average of $1.44bn.

The central bank expects CAD to lower to $10bn this year, according to a Mettis Global report.