Pakistan’s current account deficit shrank to $1.2 billion in July from $2.1 billion in June, mainly due to the tightened import policy by economic managers.
1/2 The current account deficit shrank to $1.2bn in Jul from $2.2bn in Jun, largely reflecting a sharp decline in energy imports & a continued moderation in other imports. Visit #EasyData https://t.co/kiWKKJLduD pic.twitter.com/Kt3Ev5BjMt
— SBP (@StateBank_Pak) August 23, 2022
The imports of the commodities also declined to $5.3 billion in July as compared to $7 billion in June 2022, according to data released by the State Bank of Pakistan (SBP). On the flip side, the country’s exports also dipped to $2.2 billion in July 2022 from $3.1 billion in June.
The import bill, on account of services, also had a drastic cut and dropped to $790 million in July as compared to $1.31 billion. Services exports also reduced to $530 million from $635 million during the same period.
Overall, the balance of trade for goods and services reduced to $3.3 billion in July from $4.5 billion reported in June 2022.
The inflow of remittances also fell to $2.52 billion from $2.76 billion, mainly because of the seasonal impact.
The narrower deficit is the result of wide-ranging measures taken in recent months to moderate growth and contain imports, including tight monetary policy, fiscal consolidation, and some temporary administrative measures, the SBP commented.
The government restored the imports of various goods and services after a brief ban on luxury items, including the imports of major machineries, automobiles, and mobile phones. Besides, the imports of petroleum products also fell with consumption due to its higher prices in the international market and its direct impact on prices in the local market.
