Islamabad: The Current Account Deficit (CAD) of Pakistan widened to 36% in October on a month-on-month basis, the State Bank of Pakistan reported on Monday.
Compared to $363 million recorded in September, the CAD of Pakistan reached $567 million in October. On an MoM basis, that is a 36% jump in deficit. However, on a year-on-year basis, the current account deficit declined sharply by 68% because CAD had hit $1.78 billion in October last year.
Pakistan’s Current Account Deficit shrinks 37% YoY in 1Q of FY23
It is pertinent to mention here that CAD dropped massively during the first four months of the current fiscal year. During the first four months of FY23 (July-October), the deficit clocked in at $2.82 billion, dropping 46.8% or $2.48 billion from the same period last year when CAD had reached an alarming $5.3 billion.
The State Bank of Pakistan attributed the significant shrinkage in CAD to the declining trend in imports.
2/2 During Jul-Oct 2022, CAD was $2.8 billion (against $5.3 billion) as imports reduced by $2.7 billion (or 11.6%) and exports increased by $0.2 billion (or 2.6%) compared to Jul-Oct 2021.https://t.co/Od8ikVdOd5
— SBP (@StateBank_Pak) November 21, 2022
“Continuous decline in imports helped improve the Current Account Deficit (CAD) during the first four months of FY23,” the SBP stated.
It further said that during the first four months of FY23, imports reduced by $2.7 billion or 11.6%, while exports increased by $0.2 billion or 2.6% compared to the same period last year.
It is also important to note that Pakistan’s CAD had crossed $17 billion during FY22, after a staggering 531% increase in the balance of payments compared to the current account deficit of $2.8 billion recorded during FY21.
