According to statistics released by the State Bank of Pakistan (SBP) on Monday, the current account deficit decreased 68.13% year over year to total $0.57 billion in October.
In comparison to September, when it stood at $0.36 billion, the deficit jumped by 56.2 percent, reaching its highest level since April 2021.
According to the figures, the deficit for the first four months of the current fiscal year was $2.8 billion, down 46.82 percent from $5.3 billion from July to October 2021.
According to the central bank, “continued import drop helped improve the current account imbalance.”
When compared to the same quarter in FY22, imports fell by $2.7 billion (11.6%) and exports increased by $0.2 billion (2.6%).
The current account deficit increased month over month despite a remark made last week by Finance Minister Ishaq Dar that it was anticipated to be below $0.4 billion.
Dar said that the deficit was being closely watched, managed, and handled for the good of the nation. “The current account deficit was at $316 million in September and expected to be below $400 million in October,” he said, adding, “If this continues at the same pace, it will be around $5-6 billion for the year, (while) the projected was $12 billion.”
The deficit was not at a worrying level, the finance minister stressed.
Pakistan had a huge current account deficit of $17.3 billion, or an average of $1.44 billion per month, in the preceding fiscal year.
To reduce the strain on the external account and maintain the foreign exchange reserves, the government has recently implemented a variety of steps to cut the import bill. Limiting imports and prohibiting the issuing of letters of credit are two examples of these actions.
Moreover, Federal Minister for Finance and Revenue Ishaq Dar dismissed speculations pertaining to the countryÂ’s economy, he said, by the end of this year, the current account deficit is predicted to peak and become untenable.
There are no such worries, and we are keeping a close eye, I would like to say. It is being handled expertly.