June 27, 2022 (MLN): Pakistan’s current account deficit (CAD) was recorded at $1.4 billion in May 2022, showing a jump of 2.3x when compared to a deficit of $618 million in April 2022, mainly due to a decline in remittances and exports on account of the Eid holidays, said the central bank on Tuesday on Twitter.
While overall imports fell compared to April 2022.
“Moreover, excluding in-kind imports that are fully financed and thus do not undermine the sustainability of the CAD, the deficit was more modest at $1bn,” it added.
According to the latest data released by the State Bank of Pakistan, CAD surged by 2.2 times YoY against the deficit of $640mn reported in the same month last year.
Cumulatively, the current account witnessed a deficit of around $15.2bn during July-May 2022 as opposed to $1.18bn in the corresponding period last year.
According to the details made available by the central bank, the trade deficit in goods increased by around 12% MoM to $3.18bn in May 2022 as exports of goods declined by 21% MoM while imports saw a drop of 6% MoM. However, the trade deficit in goods jumped by 13% YoY in the said month.
Meanwhile, the trade balance in services, while still negative, inched up by 4% MoM to $380mn courtesy of a 14% MoM increase in imports while the exports went down by 20% MoM.
On year-on-year, the trade deficit in services went up by around 3 times YoY.
It is worth noting that workers’ remittances, the backbone of the country’s economy, witnessed a drop of 25% MoM, clocking in at $2.33bn in May 2022 from $3.13bn in April 2022 owing to the Eid holidays.
On a cumulative basis during July-May FY22, remittances by overseas Pakistani moved up by 6% YoY to $28.4bn from $26.74bn recorded in 11MFY21.
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