Karachi: The country’s current account posted a massive $632-million deficit in May 2021 compared to a surplus of $329 million recorded in May 2020, the State Bank of Pakistan (SBP) reported on Friday, in what becomes the highest monthly deficit after December 2019.

On a monthly basis, the current account deficit in May 2021 is also higher than what it was in April 2021 when it stood at $188 million.

Overall, during 11MFY21, the country’s current account surplus now stands at $153 million compared with deficit of $4.33 billion in the same period of the previous fiscal year.

The SBP said that the current account deficit has come on the back of lower exports that decreased due to partial lockdowns imposed during the month and long Eid holidays in May. Remittances moderated, which is a usual post-Eid phenomenon, added the central bank.

July-May trade deficit up 29.5pc YoY

Pakistan exports showed an increase of 18.7 percent to $1.657 billion in May 2021 as compared to $1.396 billion in May 2020. However, exports in May declined by 25% when compared with April 2021, revealed data released by the Ministry of Commerce.

Whereas remittances from overseas workers stood at $2.49 billion in May 2021, recording an increase of 34% year-on-year. The country's central bank added that the dip usually experienced post-Eid holidays was also smaller this year.

Remittances increase 34% year-on-year to near $2.5 billion in May

It may be mentioned here that the SBP has already estimated that the current account deficit is likely to remain below 1 percent of GDP at the end of this fiscal year supported by continued strong prospects for remittances and pickup in exports, especially textile sector.