Current account deficit shrinks 73pc in 9 months

Published April 24, 2020
The current account deficit in the current and last fiscal years has fallen from its peak of $20bn in FY18 mainly on account of falling imports. — Reuters/File
The current account deficit in the current and last fiscal years has fallen from its peak of $20bn in FY18 mainly on account of falling imports. — Reuters/File

KARACHI: Current account deficit during the first three quarters of current fiscal year shrank by 73 per cent to $2.768 billion compared to $10.284bn in the same period last fiscal year, data released by the State Bank of Pakistan (SBP) showed on Thursday.

The current account deficit in the current and last fiscal years has fallen from its peak of $20bn in FY18 mainly on account of falling imports.

The SBP data showed the deficit in March was just $6 million compared to $283m in the corresponding month of last year.

The details showed that exports of goods during the nine months under review remained relatively unchanged at $18.256bn compared to $18.051bn last year.

However, exports during March declined to $1.818bn compared to $2.037bn in March 2019.

On the other hand, imports declined by a massive 16pc to $32.936bn compared to $39.312bn in the last year. The huge reduction in import bill has been the major driver behind sharp reduction in current account deficit.

Meanwhile, services exports fell to $4.247bn during the nine months compared to $4.566bn last year whereas imports of services also declined to $6.688bn.

The narrowing current account deficit has helped government sustain and improve its foreign exchange reserves. The inflow of remittances showed 6pc growth while foreign direct investment also increased by 137pc during the current fiscal year.

The IMF projects that after the impact of Covid 19, Pakistan’s current account deficit will be $4.5bn, or 1.7pc of GDP, by the end of the fiscal year, where it was originally projected to be $6bn, or 2.2pc of GDP.

Published in Dawn, April 24th, 2020

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Rule by law

Rule by law

‘The rule of law’ is being weaponised, taking on whatever meaning that fits the political objectives of those invoking it.

Editorial

Isfahan strikes
Updated 20 Apr, 2024

Isfahan strikes

True de-escalation means Israel must start behaving like a normal state, not a rogue nation that threatens the entire region.
President’s speech
20 Apr, 2024

President’s speech

PRESIDENT Asif Ali Zardari seems to have managed to hit all the right notes in his address to the joint sitting of...
Karachi terror
20 Apr, 2024

Karachi terror

IS urban terrorism returning to Karachi? Yesterday’s deplorable suicide bombing attack on a van carrying five...
X post facto
Updated 19 Apr, 2024

X post facto

Our decision-makers should realise the harm they are causing.
Insufficient inquiry
19 Apr, 2024

Insufficient inquiry

UNLESS the state is honest about the mistakes its functionaries have made, we will be doomed to repeat our follies....
Melting glaciers
19 Apr, 2024

Melting glaciers

AFTER several rain-related deaths in KP in recent days, the Provincial Disaster Management Authority has sprung into...