Pakistan Current Account deficit nosedives 75% YoY, 76% MoM to $50 mln in February

March 22, 2021 (MLN): Pakistan’s Current Account deficit (CAD) has declined by 75% YoY and 76% MoM to USD50 million in February 2021, compared with the deficit of USD197 million in February 2020 and USD210 million last month.

However, during 8MFY21, the current account still showed a surplus of USD881 million compared to a deficit of USD2.74 billion 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 more than offset the increase in imports due to domestic food shortages and recovering economic activity.

In the month of February, the MoM improvement was due to a 45% decline in primary income deficit, whereas, the YoY improvement was attributable to 8% and 24% YoY rise in total exports and remittances respectively.

Total Exports (goods and services) during the month jumped by 3% MoM to USD2.65 billion compared with USD2.58 billion logged in the previous month. Similarly, on a yearly basis, total exports witnessed an increase of 8% in Feb’21 as it was USD 2.46 billion in Feb’20.

While the combined imports of goods and services during the month under review grew by 2% MoM to USD 5.184 billion as opposed to USD 5.07 billion recorded in Jan’21. On a yearly basis, overall imports of goods and services soared by17% in Feb’21 from USD4.437 billion in the same month a year ago.

This resulted in a trade deficit of USD2.535 billion in Feb’21, up by 1% MoM and 28% YoY.

Cumulatively, during 8MFY21, total exports stood at USD19.87 billion, shrank by 2% YoY, whereas total imports showed a growth of 4% YoY to USD37.296 billion, resulting in a trade deficit of USD17.42 billion, up by 13% YoY.

Workers' Remittances by overseas Pakistani registered a growth of 24% YoY to USD2.26 billion during Feb’21, while on monthly basis it remained flat.

During 8MFY21, the continued healthy growth in inflows took the cumulative figure to a record level of US$18.74 billion, up by 24% YoY.

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