Current Account Deficit Shrinks by 60% in First Half of FY23

Pakistan’s current account deficit decreased by 60 percent on a year-on-year (YoY) basis to clock in at $3.66 billion in the first six months of the current fiscal year (1HFY23), data released by the State Bank of Pakistan (SBP) showed on Wednesday. The country recorded a current deficit of $9 billion during the same period of the previous fiscal year (FY22). The current account deficit decreased by 78 percent on a year-on-year (YoY) basis to clock in at $0.4 billion in December 2022, compared to the $1.85 billion recorded in December 2021. However, on a month-on-month (MoM) basis, the current account deficit increased by 59 percent, compared to the $0.25 billion recorded in November. It is pertinent to mention here that the government has taken stringent measures to reduce imports through several administrative measures. The restrictions have severely impacted manufacturing in the country with many companies temporarily halting production due to the inability to import raw materials. More importantly, the curb on imports resulting in a decreased import bill has coincided with decreased exports and remittances as well.