Current account deficit declines to $0.5bn: SBP

Lowest monthly deficit recorded this fiscal year

The current account deficit shrank to $0.5 billion, the lowest monthly deficit recorded this fiscal year, according to data released by the State Bank of Pakistan (SBP) on Saturday.

The data shows that the current account deficit plunged from $2.53 billion in January 2022 to $545 million in February while during seven months (Jul-Feb) of the current fiscal year, the current account deficit was recorded at $12.1 billion.

“The exports were close to all-time highs, rising 16% compared to Jan. Imports fell by 18% to their lowest level in FY22,” the SBP said on its official twitter handle.

According to reports, the export of goods rose to $2.9 billion in February from $2.5 billion in the preceding month.

The imports on the other hand fell sharply to $5.166 billion in February from $6.3 billion in the preceding month. The overall trade deficit also shrunk to $2.281 billion compared to the deficit of $3.8 billion in January 2022.

Similarly, the trade deficit in services also shrank to $284 million in February compared to the deficit of $485 million in January, whereas the primary income deficit shrank to $287 million compared to $504 million in January.

Workers’ remittances increased to $2.19 billion against $2.144 billion in January 2022, whereas the remittances during Jul-Feb (2021-22) increased to $20.14 billion against $18.7 billion in same period of previous current fiscal year.

Federal Minister for Planning and Development Asad Umar also tweeted about the “great news” of the “sharp reduction”. The minister maintained that exports remained strong and imports were moderating while growth continued in large scale manufacturing.