Current account deficit jumps to $2.6bn in January

February 24, 2022 (MLN): Pakistan's current account deficit (CAD) rose to $2.6 billion in January 2022 from $1.9bn in December 2021, largely due to imports in kind that are fully financed, the central bank said on Twitter today.

Excluding these, the deficit would have been around $1bn lower in January 2022, it added.

While the current account balance rang alarming bells as the deficit widened by 12x YoY from $219 million reported in January 2021.

The country recorded CAD of $11.58bn in the first seven months of the ongoing fiscal year as opposed to $1.03 bn surplus recorded in the same period last year, reflecting the robust increase in imports.

The trade deficit in goods inched up by around 8.5% MoM to $3.93bn in January 2022 as exports of goods dropped by nearly 15% MoM while imports saw a marginal decrease of 2% MoM. On year on year, the trade deficit in goods widened by 45% in the said month.

Meanwhile, the trade balance in services, while still negative, surged by 24% MoM to $406mn courtesy of a 24% fall in exports while imports edged lower by 8.3% during the period under review.

On year-on-year, the trade deficit in services went up by 3x YoY in January 2022.

Workers' remittances declined by 15% MoM to $2.14bn from $2.5bn in December 2021.

On a cumulative basis during July-Jan FY22, remittances by overseas Pakistani moved up by 9% YoY to $17.95bn from $16.46bn recorded in July-Jan FY21.

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