Pakistan’s Current Account deficit jumps by 52% MoM to $47mn in March

April 24, 2021 (MLN): Pakistan’s Current Account deficit (CAD) has increased by 52% MoM to $47mn in March 2021, compared with the deficit of $31mn in February 2021.

 However, in the same month last year, the country’s current account posted a surplus of $50mn.

On the contrary, during 9MFY21, the current account remained in surplus of around $959mn against a deficit of $4.14bn in the corresponding period last year.

The surplus in the current account was largely attributable to continued strong growth in workers’ remittances, and a sustained recovery in exports since Nov20 in year-on-year terms, which offset the increase in imports due to domestic food shortages and recovering economic activity.

In the month of March’21, the primary reason behind the deficit was a 50% YoY increase in total imports to $5.8mn compared to $3.89mn in March 2020. While on monthly basis, the deficit was increased due to 13% MoM jump in total imports and 119% MoM soar in the primary income deficit to $400mn.

Total Exports during the month jumped by 19% MoM to $3.17bn compared with $2.6 bn logged in the previous month. Similarly, on a yearly basis, total exports witnessed a growth of 41% in March’21 as it was $2.25bn in the same month a year ago.

This resulted in a trade deficit of $2.67bn in March’21, up by 6% MoM and 63% YoY.

Cumulatively, during July-Mar FY21, total exports stood at $23bn, up by 2% YoY, whereas total imports showed a growth of 4% YoY to $43.1mn, resulting in a trade deficit of $20bn, which soared by 7% YoY.

Workers' Remittances by overseas Pakistani registered a growth of 20% MoM and 43% YoY to $.27bn during March’21, compared to $2.26bn in the previous month and $1.9bn in March’20.

During 9MFY21, the continued healthy growth in inflows took the cumulative figure to a record level of $21.47bn, up by 26% YoY.

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