The International Monetary Fund (IMF) has worked out Pakistan’s current account deficit (CAD) target of $4.55 billion for the new financial year, sources privy to the matter informed ProPakistani.
The lender has warned that current CAD levels may spike by $1.544 billion in FY2024-25.
IMF said the deficit is estimated to be $3.01 billion by end-June FY24, which is $2.64 billion less than the set target of $5.65 billion, sources added.
In FY23, the current account deficit was $2.235 billion. The last fully elected government under ex-Prime Minister Imran Khan had left behind a deficit of $17.48 billion. In the years that followed, CAD levels were significantly reduced courtesy of stringent import controls and a temporary embargo on letters of credit by the central bank.
However, exports collapsed and hurt the domestic industry, leading to massive unemployment as companies were unable to import raw materials necessary to maintain the required production levels. The situation has improved since then, but the IMF’s latest forecast on further spikes in the current account deficit could complicate things once again.
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