KARACHI: The country’s current account recorded a $3.4 billion deficit during the first quarter of this fiscal year (FY22), mainly due to higher imports.
The State Bank of Pakistan (SBP) said that the current account deficit is increasing because of a strong rebound in economic activity and higher international commodity prices.
The latest data released by SBP revealed that the external account continued to deteriorate due to a massive surge in the country’s goods imports. Cumulative, the current account posted a deficit of $3.4 billion in July-Sep of FY22 as against a surplus of $865 million recorded in the same period of the last fiscal year (FY21).
Current account for September 2021 posted a deficit of $1.113 billion against a surplus of $27 million during September 2020. The primary reason behind the deficit was a 58 percent jump in imports. On a MoM basis, the current account fell by 24 percent from last month’s (August 2021) deficit of $1.473 billion.
Pakistan’s goods import bill rose by 64 percent to $17.473 billion in the first quarter of this fiscal year, up from $10.637 billion in corresponding period of last fiscal year. Although during the period under review, good exports also moved upward, the growth was less than imports.
Good exports increased by 35 percent or $1.88 billion to $7.241 billion in July-Sep of FY22. Accordingly, the goods trade deficit surged to $10.232 billion, up by 93 percent in the first quarter of this fiscal year.
During the period under review, services trade deficit stood at $717 million, with $1.572 billion exports and $ 2.289 billion imports. Similarly, with $ 1.154 billion payments and $ 190 million receipts, the primary income sector deficit declined to $ 964 million in July-Sep of FY22.
The detailed analysis showed that the cumulative deficit of goods, service and income surged to $11.9 billion in July-Sep of FY22 compared to $7.305 billion in the same period of FY21.
Analysts are expecting a current account deficit is likely to be in the range of $10 to $11 billion in FY22 as against $4.4 billion of previous year.
Copyright Business Recorder, 2021