Islamabad: Pakistan’s current account deficit shrank more than 37% on a year-on-year basis during the first quarter (July-September) of the fiscal year 2023.
According to a monthly report published by the State Bank of Pakistan on the balance of payments, during the first three months of FY23, the current account deficit of Pakistan amounted to $2.2 billion. Compared to the $3.52 billion recorded during the same period last year, this year’s CAD dropped by 37.4%.
Simililiary, on a month-on-month basis, a decline has been witnessed in September alone as the current account deficit also narrowed down by 53.2%. It fell to $0.3 billion, compared to the $0.67 billion that was recorded in August.
The SBP attributed the significant shrinkage in CAD to the declining trend in imports.
In September, the current account deficit (CAD) declined for the 3rd month in a row. It fell to $0.3bn, less than half the level in August. In Q1FY23, the CAD has fallen to $2.2bn from $3.5bn in Q1FY22, mainly reflecting a decline in imports. https://t.co/q3LNv3pFmS pic.twitter.com/B0SgTMhWJF
— SBP (@StateBank_Pak) October 19, 2022
The report said that during the first quarter of FY23, the imports of goods and services clocked in at $18.36 billion, whereas the exports of goods and services amounted to only $9.28 billion.
Trade deficit of Pakistan declines 21.32% YoY during first quarter of FY23
The trade deficit of Pakistan recorded in the first quarter of the fiscal year 2023 declined 21.32% on a year-on-year basis, the Pakistan Bureau of Statistics (PBS) reported on Tuesday.
According to the revised data on monthly trade statistics by PBS, during the first quarter of FY23 (July-September), the trade deficit amounted to $9.2 billion. Compared to the deficit of $11.7 billion recorded during the same period of FY22, that is a sharp 21.32% drop.
The total imports during the first quarter stood at $16.44 billion compared to $18.71 billion recorded last year during the same period. Meanwhile, on a YoY basis, exports rose to $7.17 billion from $6.99 billion recorded last year in the first quarter.
In September alone, the trade deficit amounted to $2.9 billion, falling from August’s $3.58 billion. The imports in September fell to $5.34 billion from $6 billion on a month-on-month basis. Exports, however, also recorded a slight decline on an MoM basis in September as they fell to $2.44 billion from $2.48 billion.
It should also be noted that the trade deficit of Pakistan recorded a whopping increase of 55.7% during the fiscal year 2022, taking the total imbalance between imports and exports to $48.38 billion. Fuelled by the soaring trade imbalance and rising current account deficit, the forex exchange reserves have fallen to the $7.59 billion level as of October 7.