Current Account Deficit Shrinks by 86% in February to $74 Million

Pakistan’s current account deficit (CAD) decreased by 86 percent on a year-on-year (YoY) basis to clock in at $74 million in February 2023, data released by the State Bank of Pakistan (SBP) showed on Monday. The country recorded a current deficit of $0.52 billion during the same period of the previous fiscal year (FY22). At $74 million, this monthly deficit is the lowest in 24 months, according to Arif Habib Limited. The current account deficit decreased by 68 percent YoY basis to clock in at $3.86 billion in July-February FY2022-23 (8MFY23), compared to the $12.07 billion recorded in the first eight months of FY22. On a month-on-month (MoM) basis, the current account deficit decreased by $0.16 billion or 68 percent to $0.074 billion, compared to the $0.23 billion recorded in January 2023. The low CAD is on the back of import restrictions imposed by the government. The restrictions have been in place since June 2022 and since then, restrictions on letters of credit (LCs) have crippled a number of industries dependent on imports.