Current Account Deficit, one of the major macroeconomic indicators, has continued to show signs of respite as it dropped by 59 percent in February compared to its level in January of the current financial year.
According to the State Bank of Pakistan, the current account deficit in February reduced to $365 million from $873 million recorded in the previous month, showing a drop of $517 million.
Growth in remittance inflows and reducing trade deficit on the back of falling imports of the country translated into the massive improvement in the current account’s position.
This depicted that the government’s efforts to cap the current account’s deficit started showing some results. The government not only introduced various measures to enhance inflows of remittances but it also imposed duties on luxury products to discourage imports. However, the growth in exports’ earning is yet to produce a positive outcome despite the depreciation of Rupee against Dollar.
During the eight months of FY19, the current account dropped by 22 percent. It reduced to $8.84 billion this year from last year’s number of $11.42 billion. The trade deficit of the country also reduced by 11 percent whereas the inflows of remittances reported a growth of 12 percent in the same period.
Some good news after all.