The current account deficit (CAD) of Pakistan has declined by 37 percent to $2.2 billion in the first quarter of the current fiscal year.
According to the statement of State Bank of Pakistan (SBP) on its Twitter account, “In September, the current account deficit (CAD) declined for the 3rd month in a row.”
The statement also read, “It fell to $0.3 billion, less than half the level in August. In Q1FY23, the CAD has fallen to $2.2 billion from $3.5 billion in Q1FY22, mainly reflecting a decline in imports.”
Evidently, the decreased imports and rise in exports have resulted in the narrowing of the current account deficit. During the first quarter of ongoing fiscal year, Pakistan’s exports increased by five percent to $7.6 billion while imports have fallen by eight percent to $16.1 billion.
According to analysts, falling demands due to administrative measures and lower energy imports have resulted in the decline of current account deficit.
SBP has been expecting the current account deficit during the ongoing fiscal year to remain around three percent. Central bank’s latest monetary policy, issued on October 10, has stated that with the high prices of food and cotton along with lower textile imports and lower commodity prices, the current account deficit will likely be muted.