August 24, 2022 (MLN): The current account deficit (CAD) shrank to $1.2 billion in July 2022 from $2.2bn in June 2022, largely reflecting a sharp decline in energy imports & a continued moderation in other imports, the State Bank of Pakistan said on Twitter.
This 45% month-on-month decline in deficit is the result of wide-ranging measures taken in recent months to moderate growth & contain imports, including tight monetary policy, fiscal consolidation & some temporary administrative measures, it said.
However, year on year, CAD surged by 42% against the deficit of $851 million reported in the same month last year.
According to the details made available by the central bank, the trade deficit in goods decreased by around 21% MoM to $3.09bn in July 2022 as imports saw a drop of 23% MoM to $5.39bn while exports of goods were recorded at $2.30bn, down by 27% MoM. On a year-on-year basis, the trade deficit in goods also inched lower by 1.5% in the said month.
Meanwhile, the trade balance in services, while still negative, plunged by 62% MoM to $260mn courtesy of a 40% MoM decrease in imports while the exports went down by 17% MoM.
On year-on-year, the trade deficit in services edged lower by 9% YoY.
It is worth noting that worker remittances, the backbone of the country’s economy, witnessed a drop of 9% MoM, clocking in at $2.52bn from $2.76bn in June 2022.
