Pakistan’s current account deficit (CAD) has reduced to $74 million in February 2023 against $230 million in the past month owing to import restrictions and rise in remittances.
State Bank of Pakistan (SBP) tweeted: “CAD recorded $0.1 billion in February 2023 compared to a $0.5 billion deficit in February 2022. CAD decreased overall in Jul-Feb FY23 from a deficit of $12.1 billion in Jul-Feb FY22 to $3.9 billion.
According to a report by Arif Habib Limited (AHL), the deficit for February 2021 was the lowest monthly total ever.
In addition, it said that a 24% decrease in total imports during the first eight months of fiscal year 2022–23 was the main factor contributing to the deficit’s drop on an annual basis. Overall exports and remittances, however, also fell by 9% and 19%, respectively.
Pakistan restricted imports last year as the nation’s foreign exchange reserves fell to dangerously low levels.
Pakistan and the IMF are now in negotiations to restart the Extended Fund Facility, which has been suspended (EFF). The outcome of the transaction is still uncertain, though. Resuming the IMF programme will also open up new finance options for Pakistan.
Pakistan’s foreign exchange reserves have recently been supported by loan inflows from Chinese entities.
