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

Editorial

Silencing the public
Updated 21 Feb, 2024

Silencing the public

Acting as if it is unaccountable, it is now curtailing citizens’ digital rights without even bothering to come up with a justification.
Fitch’s concern
21 Feb, 2024

Fitch’s concern

AS political parties scramble to form a potentially weak coalition at the centre, the uncertainty unleashed by the...
Zoo zealotry
21 Feb, 2024

Zoo zealotry

IN a bizarre twist of faith and fur, the Indian right-wing Hindu nationalist group, Vishwa Hindu Parishad, has...
Open the books
Updated 20 Feb, 2024

Open the books

Irregularities have been so widespread that even otherwise impartial observers are joining the chorus of voices demanding a recount.
BRICS candidacy
Updated 20 Feb, 2024

BRICS candidacy

For Pakistan to successfully join BRICS or compete in other arenas internationally, the political instability at home needs to be addressed.
Pneumonia menace
20 Feb, 2024

Pneumonia menace

PANIC is on the rise as the alarming surge in pneumonia cases has created an explosion of headlines — sans...