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Current account deficit worsens by 61% MoM to $74m in October

Pakistan posts a current account surplus of $9m in November
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November 20, 2023 (MLN): The current account deficit for October 2023 widened significantly by 60.87% MoM to stand at $74 million compared to the deficit of $46m in September 2023, the latest data issued by the State Bank of Pakistan (SBP) revealed today.

It is important to highlight that while the SBP initially reported a deficit of only $8m in the previous month, the newly revised data reveals that the deficit actually amounted to $46m for that same period.

However, on a yearly basis, the current account deficit showed an improvement of 91% YoY, as the deficit stood at $849m in the same month last year.

Total exports rose by 10.47% MoM and 17.78% YoY to $3.42bn as compared to the total exports of $3.1bn in the previous month and $2.9bn in the same month of last year.

Total imports rose by 7.86% MoM to $5.17bn as compared to the imports worth $4.8bn recorded in September, while the imports showed a decline of 3.36% YoY when compared to the numbers of October of last year.

Meanwhile, on a cumulative basis, the current account deficit in the 4MFY24 was recorded at $1.06bn, showing a significant improvement of 66% YoY when compared to the deficit of $3.11bn in 4MFY23.

Furthermore, the workers' remittances improved by 11.55% MoM to $2.46bn as compared to $2.21bn in the previous month; while on a yearly basis, the remittances went up by 9.56% YoY as it stood at $2.25bn in October 2022.

Cumulatively in 4MFY24, workers' remittances were recorded at $8.8bn as compared to $10.15bn in 4MFY23, depecting a fall of 13.31% YoY.

To note, remittances had been dropping constantly in the earlier months of this year on account of increased disparity between official and grey market rates, as many non-resident Pakistanis preferred to use unofficial channels, which offered Rs20-25 higher exchange rate per dollar.

In response to these challenges, the authorities, led by the army, began crackdowns against speculators, hoarders, and smugglers to restrict illegal dollar outflows and effectively strengthening the PKR against the USD.

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Posted on: 2023-11-20T15:48:40+05:00