Pakistan’s current account deficit has fallen by a significant 29% in the first 11 months of the current outgoing financial year to $12.68 billion.
One of the gravest issues of Pakistan’s economy, the deficit stood at a staggering &17.92 billion at the same time last year according to a report by the State Bank of Pakistan (SBP). The drop in the deficit is being attributed to contraction in imports and growth in remittance inflows.
A few days ago, Governor of the SBP Dr Reza Baqir had highlighted the current account deficit as one of the major problems that Pakistan had. However, he had also said that a series of measures on imports and remittance flows had resulted in the issue coming under control to some extent.
“The deprecation of the rupee against the US dollar has resulted in the volumetric growth of exports which has cause a noticeable drop in imports” he said.
Back during the presser, Dr Baqir had estimated that the deficit for the full fiscal year 2019 would be $13 billion. He had explained that it would have fallen to as low as $10 billion if there had not been such a rise in fuel prices as there has been in recent days. SBP chief economist Dr Saeed Ahmed was of the same opinion, explaining at the same presser that average oil prices had increased by 12%.
Meanwhile, the data from the SBP shows a drop in imports in the services sector, which decreased by 14% to $8.83 billion. The import of goods also fell by 6% to $48.45 billion compared to 11 months ago.
Another aspect has been that remittances sent from Pakistanis abroad have jumped by 10%, rising to $20.19 billion from $18.29 billion. The remittances came after Pakistanis sent large amounts of money to their families around the time of Ramzan and Eid to help deal with rising inflation.
However, despite the earlier claims of Dr Baqir, exports have failed to register growth in value terms despite the central bank allowing the rupee to depreciate by 29% to Rs156.95 to the US dollar.
