Current account deficit increases marginally to $1.93bn in December

Pakistan’s current account deficit increased marginally to $1.93 billion in December 2021, a 2% month-on-month increase from $1.89 billion in November, showed data released by the State Bank of Pakistan (SBP) on Saturday.

Cumulatively, during the six-month period of the ongoing fiscal year (July-December of FY22), the current account deficit stood at $9.09 billion compared to a surplus of $1.25 billion during the same six months of the previous fiscal year (FY21), showed SBP data.

"The current account deficit was broadly unchanged at $1.93 billion in December 21 from $1.89 billion in November 21," said the SBP in a tweet on Saturday. "Cumulatively, led by a significant terms of trade shock amid ongoing economic recovery, current account deficit reached $9.09 billion in Jul-December FY22."

The current account balance is a key figure for Pakistan's economy. A widening deficit in the current account has put pressure on the local currency that continues to hover around the 176-177 level against the US dollar.

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Furthermore, Pakistan's rising imports, a number that has become a headache for policymakers, also showed no signs of slowing down in December, as total imports of goods and services shot up to $7.55 billion compared to $5.79 billion in December 2020, reflecting an increase of 30.5% YoY.

On a monthly basis, total imports inched up 3.4%, from $7.31 billion in November 21.

On the other hand, Pakistan's exports during the month of December stood at $3.598 billion, posting a yearly growth of 25%, as compared to $2.88 billion recorded in the same month of the previous year.

On a month-on-month basis, Pakistan’s total exports inched up by 9% in December 2021 compared to $3.31 billion in November, showed SBP data.