Current Account Deficit Shrinks to $623 Million in April

The country’s current account deficit narrowed significantly in April 2022 to stand at $623 million, which is only two-thirds of the deficit reported in March 2022, according to the State Bank of Pakistan. The significant reduction in imports by $246 million and an increase in remittances by $315 million had a positive outcome on the situation of the worrisome deficit that had spiraled out of control in the previous month. The current account deficit stood at $513 million in April 2021, the SBP’s data said. Cumulatively, the overall current account deficit from July to April stood at $13.779 billion. The expenses under the Covid-19 vaccine and defense-related equipment widened the deficit. The trade deficit of goods and services increased to $36.5 billion during the period of July to April of the current fiscal year as compared to $24.1 billion in the previous fiscal year. On the other hand, the strong support from the remittances showed resistance to the current account deficit. In March, inflows of remittances stood at their highest level at $3.1 billion, which is 11 percent higher than the last year. Overall, the inflows of remittances stood at $26 billion from July to April as compared to $24.2 billion reported in the corresponding period of the previous year. The present government has taken drastic measures to stop imports of luxury and non-essential items which may further contain the situation of current account deficit in the months to come.