The current account deficit in August reduced significantly to $0.703 billion in August as a result of the growth in exports and the substantial reduction in imports.
According to data released by the State Bank of Pakistan (SBP), the Current Account Deficit (CAD) fell to $0.7 billion in August compared to $1.2 billion in July 2022 and $1.5 billion reported in August 2021.
Current Account Deficit (CAD) fell to $0.7bn in Aug compared to $1.2bn in Jul. Cumulatively, Jul-Aug FY23 CAD declined by $0.5bn to $1.9bn compared to the same period last year mainly due to increase in exports by $0.5bn & contraction in imports by $0.2bn. https://t.co/q3LNv3HgLs pic.twitter.com/lpPFFNTf06
— SBP (@StateBank_Pak) September 21, 2022
The month of August reflected the marked improvement in the balance of payment situation of the country. The impact of narrowing down CAD was recorded due to a series of measures taken by the government and the banking regulator particularly to curb the luxury imports which have taken a toll on the macroeconomic indicators including the outflow of foreign exchange reserves and widening of current account deficit.
Cumulatively, Jul-Aug FY23 CAD declined by $0.5 billion to $1.9 billion compared to the same period last year mainly due to an increase in exports by $0.5 billion & contraction in imports by $0.2 billion. The current account deficit stood at $2.3 billion during the same period of the last financial year.
The country’s balance of payment for goods reduced to $6 billion during the first two months as compared to $6.7 billion recorded in a similar period of the last financial year. On the other hand, the balance of payment for services was also reduced to $609 million from July to August as compared to $675 million reported in the same period of the last financial year.
Moreover, the seasonal drop was also seen in remittances which reduced to $5.2 billion in FY23 from $5.4 billion recorded in the same period of the last financial year.