Current account deficit jumps by 8% MoM in Nov

December 20, 2021 (MLN): Pakistan’s current account deficit widened slightly by 8% MoM to stand at $1.9 billion in November 2021 from $1.76bn in October 2021 as imports outstripped strong exports & robust remittances, according to the latest data released by State Bank of Pakistan (SBP).

Imports were mainly lifted by high international commodity prices in addition to strong domestic economic recovery, the central bank said on Twitter.

However, in the same month last year, the country’s current account posted a surplus of $563mn.

In GDP terms, the deficit stood at 7.4% of GDP during the month compared to 6.7% in the previous month.

During 5MFY22, the current account witnessed a deficit of around $7.089bn against a surplus of $1.876bn in the corresponding period last year.

The trade deficit in goods increased by around 2% MoM to $3.7bn in Nov’21 as imports of goods increased by 7% MoM to $6.4bn while exports saw a jump of 14% MoM to $2.7bn. However, the trade deficit in goods has ballooned by 103% YoY in the said month due to a 58% YoY increase in imports, while exports also grew by 21% YoY.

Meanwhile, the trade deficit in services, improved by 21% MoM to $249mn courtesy of a 3% MoM decline in imports to $832mn while the exports went up by 6% MoM to $583mn.

On year-on-year, the trade deficit in services swelled by 408% YoY, on the back of a 50% YoY increase in imports of services while services exports rose by only 15% YoY.

This resulted in an overall trade deficit (goods and services) of $3.95bn in Nov’21, up by 111% YoY while it remained unchanged on monthly basis.

Moreover, it is worth noting that worker remittances, the backbone of the country’s economy, witnessed a 7% MoM decline, clocking in at $2.35bn from $2.5bn in Oct’21. On yearly basis, remittances inched up by 1% YoY from $2.34bn in Nov’20.

On a cumulative basis during July-Nov FY22, remittances by overseas Pakistani moved up by 10% YoY to $12.9bn from $11.76bn recorded in July-Nov FY21.

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