Pakistan's current account deficit nosedives 76pc to $50m in February

Published March 22, 2021
The current account showed a surplus of $881 million during the first eight months of FY2021. — AFP/File
The current account showed a surplus of $881 million during the first eight months of FY2021. — AFP/File

Pakistan’s current account deficit (CAD) for February declined 75 per cent year-on-year (YoY) and 76pc month-on-month (MoM) to $50 million, compared to a deficit of $197m in Feb 2020 and $210m last month.

This marks the third consecutive month the current account has recorded a deficit, after registering a surplus for five months in a row.

Overall, during the first eight months of FY21, the current account shows a surplus of $881m compared to a deficit of $2.74 billion in the corresponding period last year.

The narrowing of the deficit in February is largely attributable to continued strong growth in workers’ remittances and a sustained recovery in exports since November 2020, which more than offset the increase in imports due to domestic food shortages and recovering economic activity.

In February, the MoM improvement was due to a 45pc decline in primary income deficit, whereas the YoY improvement was attributable to 8pc and 24pc rise in total exports and remittances, respectively.

Total exports (goods and services) during the month jumped 3pc to $2.65bn compared to the $2.58bn logged in the previous month. Similarly, on a yearly basis, total exports witnessed an increase of 8pc in Feb 2021 against $2.46bn in Feb 2020.

In contrast, the combined imports of goods and services during the month under review grew 2pc to $5.184bn as opposed to $5.07bn recorded in January. On a yearly basis, overall imports of goods and services soared 17pc from $4.437bn in February last year.

This resulted in a trade deficit of $2.535bn in Feb 2021, up 1pc MoM and 28pc YoY.

Cumulatively, during 8MFY21, total exports stood at $19.87bn, shrinking 2pc YoY, whereas total imports grew 4pc YoY to $37.296bn, resulting in a trade deficit of $17.42bn, up 13pc YoY.

Workers' remittances by overseas Pakistanis registered a growth of 24pc YoY to $2.26bn during Feb 2021, while on a monthly basis they remained flat.

During the first eight months of FY 21, the continued healthy growth in inflows took the cumulative figure to a record level of $18.74bn, up 24pc YoY.

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

Opinion

Editorial

New funds
27 Feb, 2024

New funds

PAKISTAN plans to seek a new loan of $6bn from the IMF under its Extended Fund Facility for a period of three years,...
Missing link
27 Feb, 2024

Missing link

WITH most of Punjab and KP now accessible via motorways, which have greatly eased road travel for the bulk of the...
Tragedy averted
27 Feb, 2024

Tragedy averted

IN a distressing episode that recently unfolded in Lahore’s Ichra Bazaar, a young woman found herself the focal...
Spirit of ’74
26 Feb, 2024

Spirit of ’74

FOR three days in 1974, starting Feb 22, Lahore witnessed an epochal meeting of 38 Muslim nations as it hosted the...
Silence strategy
Updated 26 Feb, 2024

Silence strategy

Attempts at internet censorship only serve to tarnish Pakistan’s image globally and betray the democratic principles the country purports to uphold.
Nepra’s reluctance
26 Feb, 2024

Nepra’s reluctance

WHAT is the point in having a regulator that does not punish the entities it oversees for misconduct and...