Pakistan’s Current Account deficit shrinks to $623mn in April

May 20, 2022 (MLN): Pakistan’s current account deficit (CAD) was recorded at $623 million in April 2022, down by 39% when compared to $1.02 billion in March 2022 on the back of an increase in workers’ remittances and a fall in imports, the latest data released by the State Bank of Pakistan showed.

However, year on year, CAD surged by 2.32x against the deficit of $268mn reported in the same month last year.

Cumulatively, the current account witnessed a deficit of around $13.78bn during July-April 2022 as opposed to $543mn in the corresponding period last year.

According to the details made available by the central bank, the trade deficit in goods decreased by around 10% MoM to $2.85bn in April 2022 as exports of goods inched up by 3% MoM while imports saw a drop of 4% MoM. However, the trade deficit in goods jumped by 7% YoY in the said month.

Meanwhile, the trade balance in services, while still negative, escalated by 41% MoM to $387mn courtesy of a 7% MoM increase in imports while the exports went down by 7% MoM.

On year-on-year, the trade deficit in services went up by 2.61 times YoY.

It is worth noting that worker remittances, the backbone of the country’s economy, witnessed an upsurge of 11% MoM, clocking in at $3.13bn from $2.80bn in March 2022. This highest ever monthly remittance was huge support towards declining monthly CAD.

On a cumulative basis during July-April FY22, remittances by overseas Pakistani moved up by 8% YoY to $26.08bn from $24.23bn recorded in 10MFY21.

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