KARACHI: Pakistan’s current account deficit widened by $204 million or 56% to $567 million for October 2022 from $363 million in the month of September, a 68% year-on-year (YoY) decline. Gaya has successfully curbed some imports due to government restrictions.
During the first four months of the current fiscal year (4MFY23), the current account deficit narrowed by 47% year-on-year to $2.821 billion as against $5.305 billion, data released by the State Bank of Pakistan (SBP) on Monday showed. Dollar is done. In the same period of the previous financial year.
“The month-on-month decline in the deficit can be attributed mainly to a 9 percent month-on-month ($221 million) drop in workers’ remittances to $2.216 million,” Spectrum Research, a brokerage house, said in a note.
1/2 CAD was $ 0.57 billion in Oct 2022 against a deficit of $0.36 billion in Sep 2022. Continuous decline in imports helped improve the Current Account Deficit (CAD) during first four months of FY23. pic.twitter.com/SgkolTu4GV
— SBP (@StateBank_Pak) November 21, 2022
During 4MFY22 or July-October FY2023, workers’ remittances also declined by 9% or $927 million to $9.901 billion. As the monthly average decreased to $2,475 million from $2.707 million.
“Higher spreads between interbank and open market, rampant inflation, and shift to informal channels on rising interest rates abroad will weigh on remittances,” the brokerage said.
However, the trade deficit during the period under review narrowed by $79 million or 3 percent to $2.305 million, while exports decreased by 7 percent year-on-year to $2.282 million, while imports decreased by 5 percent year-on-year. 4.587 million dollars remained.
2/2 During Jul-Oct 2022, CAD was $2.8 billion (against $5.3 billion) as imports reduced by $2.7 billion (or 11.6%) and exports increased by $0.2 billion (or 2.6%) compared to Jul-Oct 2021.https://t.co/Od8ikVdOd5
— SBP (@StateBank_Pak) November 21, 2022
According to the data, exports of goods rose from $9.56 billion in July-October 2021-22 to $9.8 billion in the same period of the current fiscal year.
On the other hand, imports of goods decreased from $23.32 billion to $20.6 billion in the period under review.
The overall trade deficit also narrowed to $10.8 billion in the first four months of fiscal 2023, compared to a deficit of $13.75 billion in the same period last fiscal.
Similarly, the trade deficit in services narrowed to $812 million during the July-October period from $1.3 billion in the same period last year.
The core revenue deficit narrowed to $1.46 billion in 4MFY23 from $1.5 billion in the corresponding period last year.
The combined deficit of goods, services and basic income also narrowed to $13.1 billion in the same period, as against $16.6 billion in the same period last year.
“The decline in the import bill was mainly due to a slight fall in international commodity prices, likewise, the moderate import policy of the government also helped to reduce the import bill,” Spectrum Research said. said
According to the last monetary policy, the State Bank expects the current account deficit to remain at 3 percent of GDP during FY23.
