Pakistan’s current account deficit clocks in at $74m in October

Pakistan’s current account posted a deficit of $74 million in October 2023, showed data released by the State Bank of Pakistan (SBP) on Monday.

On a yearly basis, the CAD was significantly lower, i.e. over 91%, than the $849 million recorded in the same month last year.

However, on a monthly basis, the deficit was 61% higher than $46 million recorded in September.

As per the central bank data, the country’s exports (goods and services) increased to $3.418 billion in October 2023 against $2.902 billion in October 2022, relecting a jump of 18%.

On the other hand, total imports lowered by 3% to $5.17 billion in October 2023 against $5.35 billion in the same period last year.

According to the SBP, Pakistan posted a current account deficit of $1.06 billion in July-October of FY24 as compared to a deficit of $3.1 billion during the same month of last fiscal year (FY23), depicting a massive decline of over $2 billion.

The central bank in its last Monetary Policy Committee (MPC) meeting, held on October 30, noted a substantial improvement in the current account balance, as the deficit narrowed over 58% YoY to $947 million in Jul-Sep FY24, while almost leveling out in September 2023.

The current account is a key figure for cash-strapped Pakistan that relies heavily on imports to run its economy. A widening deficit puts pressure on the exchange rate and drains official foreign exchange reserves that stood at a little over $7.6 billion, according to the latest data.