Pakistan’s current account posts deficit of $270mn in May 2024

Pakistan’s current account posted a provisional deficit of $270 million in May 2024 compared to a revised surplus of $499 million in April 2024, revealed data released by the State Bank of Pakistan (SBP) on Friday.

Overall, during the eleven months of the ongoing fiscal year FY24, the current account balance stood at a deficit of $464 million, still massively lower than $3.76 billion in the same period of the previous year.

Low economic growth along with high inflation have helped curtail Pakistan’s current account deficit with an increase in exports and remittances helping the cause. A high interest rate and some restrictions on imports have also aided the policymakers’ objective of a narrower current account deficit.

Pakistan’s current account posts surplus of $619mn in March

During May 2024, Pakistan’s exports of goods and services stood at $3.69 billion, while imports clocked in at $5.93 billion.

Meanwhile, remittances in May clocked in at $3.24 billion.

11MFY24

In 11MFY24, the country’s total export of goods and services amounted to $35.81 billion. Whereas, imports clocked in at $57.63 billion during the period, according to SBP data.

The country’s worker remittances clocked in at $27.1 billion, an increase of nearly 8% as compared to same period last year.

The current account is a key figure for cash-strapped Pakistan which relies heavily on imports to run its economy. A widening deficit puts pressure on the exchange rate and drains official foreign exchange reserves.

Pakistan is currently engaged in talks with the International Monetary Fund (IMF) over a new longer and longer bailout with the lender as it looks to shore up its central bank’s foreign exchange reserves, which currently stand at $9.13 billion.