According to data released by the central bank the current account deficit has climbed to $9.1 billion in the first half of the current fiscal year, as compared to a $1.2 billion surplus in the same period last year.
According to reports, the current account deficit stands at 5.7 per cent of the Gross Domestic Product (GDP).
In 2021, the calendar-year deficit stood at $12.2 billion compared to a $245 million surplus in the previous year.
Pakistan Bureau of Statistics (PBS) data showed that one of the major components of the current account, the trade deficit, increased 106 per cent to $25.5 billion in July-December FY2022.
In the last six months, the current account’s performance has deteriorated as imports have outpaced exports due to domestic economic recovery from the COVID-19 pandemic and higher global commodity prices.
The SBP expects a deficit of 4 per cent of GDP during the current fiscal year, while analysts forecast the deficit to be 5 per cent of GDP or $16.8 billion.
Pakistan debt repayment for FY2022 stands at $14.3 billion (including China’s safe deposit of $4 billion). The country has to repay a foreign loan of $8.6 billion in the second half of FY2022.
The government is confident of easing macroeconomic concerns and improving performance of the current account after the potential resumption of the International Monetary Fund (IMF) loan programme.
The revival of the IMF bailout is expected to unlock financing from other international financial institutions. In addition the government is also set to issue a seven-year dollar denominated sukuk in the international debt markets.
