Current account deficit widened to $1.66bn in Oct'21

November 19, 2021 (MLN): Pakistan’s current account deficit widened by 46.65% MoM to stand at $1.66 billion in October 2021 from $1.13bn in September 2021 on the back of a moderate decline in exports & remittances &some uptick in services imports, according to the latest data released by State Bank of Pakistan (SBP).

High energy prices kept the import bill elevated despite a downtick in non-energy imports, the central bank said on Twitter.

However, in the same month last year, the country’s current account posted a surplus of $448mn.

During 4MFY22, the current account witnessed a deficit of around $5.084bn against a surplus of $1.313bn in the corresponding period last year.

The trade deficit in goods increased by around 4.88% MoM to $3.59bn in Oct’21 as exports of goods fell by 7.06% MoM while imports saw a marginal decrease of 0.31% MoM. However, the trade deficit in goods has ballooned by 2.37x YoY in the said month.

Meanwhile, the trade balance in services, while still negative, also escalated by 76.25% MoM to $282mn courtesy of an 11.66% MoM increase in imports while the exports went down by 6.5% MoM.

On year-on-year, the trade deficit in services went up by 30% YoY.

It is worth noting that worker remittances, the backbone of the country’s economy, witnessed a 5.7% MoM decline, clocking in at $2.52bn from $2.67bn in Sept’21.

On a cumulative basis during July-Oct FY22, remittances by overseas Pakistani moved up by 12% YoY to $10.55bn from $9.43bn recorded in July-Oct FY21.

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