The current account deficit (CAD) was broadly unchanged at $1.93 billion in Dec 21 from $1.89 billion in Nov 21, State Bank of Pakistan said on Saturday.
Cumulatively, led by significant terms of trade shock amid ongoing economic recovery, CAD reached $9.09 billion in July-Dec FY22.
The data released by the Central Bank said exports of goods and services in the first half of the financial year 2021-22 were higher compared to the same period of last year as they rose to $15.24 billion and $3.4 billion respectively in Jul-Dec (FY22) from $11.84 billion and $2.8 billion in the same period of last year.
However, on account of higher imports, the balance of trade in goods expanded to $21.2 billion in the period under review while that of services also expanded to $1.8 billion.
A current account deficit is normal for a country like Pakistan where saving is low and which is undergoing a growth recovery. Two things are important that it is not too large, and that the country is able to finance it without losing foreign exchange reserves.
Pakistan’s market-based exchange rate system introduced in June 2019 will help ensure the current account does not become unsustainable like in the past. —APP
