Pakistan’s current account records $270 million deficit in May 2024

Throughout the eleven months of fiscal year FY24, the current account registered a deficit of $464 million

Pakistan’s current account showed a deficit of $270 million in May 2024, contrasting sharply with April’s revised surplus of $499 million, according to data released by the State Bank of Pakistan (SBP) on Friday.

Throughout the eleven months of fiscal year FY24, the current account registered a deficit of $464 million, a significant improvement from the $3.76 billion deficit reported in the same period last year.

The country’s economic growth remained subdued while inflation remained high, contributing to a reduced current account deficit. Increased exports and remittances further supported this trend. Government policies such as high interest rates and import restrictions also aimed to narrow the current account gap.

In May 2024, Pakistan’s exports of goods and services amounted to $3.69 billion, whereas imports totaled $5.93 billion. Remittances during the same period reached $3.24 billion.

For the period of 11 months ending FY24, Pakistan’s total exports of goods and services were $35.81 billion, while imports stood at $57.63 billion according to SBP figures. Worker remittances totaled $27.1 billion, marking an almost 8% increase from the previous year.

The current account balance is critical for Pakistan, a nation heavily reliant on imports to sustain its economy. A widening deficit strains the exchange rate and depletes official foreign exchange reserves. Currently, Pakistan is in negotiations with the International Monetary Fund (IMF) for a new extended bailout program, aiming to bolster the country’s foreign exchange reserves, which currently stand at $9.13 billion.

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