KARACHI: The country’s current account deficit sharply declined by 39 percent during the month of April 2022, supported by lower goods import bill and record workers’ remittances.
The State Bank of Pakistan (SBP) late Thursday night issued the statistics of CA deficit, which was on increase for the last many months due to rising imports and became a matter of concern for the new government.
The SBP reported that current account deficit amounted to $623 million in April 2022 compared to $1.015 billion in March 2022, depicting a decline of $392 million.
According to the SBP, a rise in workers’ remittances worth $315 million and a fall in imports by $246 million explain this reduction.
The country received all-time high, ie, over $3 billion home remittances in April. In addition to this, import bill shrank to $6 billion in April 2022 from $6.247 billion in March 2022.
Cumulatively, the country’s current account deficit rose to $13.78 billion in the first ten months (July-April) of this fiscal year (FY22) compared to $ 543 million in same period of last fiscal year (FY21).
Pakistan's current account deficit clocks in at $1.03bn in March
The government is making efforts to reduce the import bill as the country is facing a serious cash crisis due to depleting foreign exchange reserves. The SBP’s foreign exchange reserves were declined to $10.16 billion as on May 13, 2022. While, the exchange rate has crossed Rs 200 against the dollar in interbank market on Thursday due to higher demand and lower supply.
The federal government Thursday also announced to impose ban on import of a 38 luxury items to curtail import bill and save precious foreign exchange.
With this move, it is expected that current account deficit will further reduce in coming months.
Presently, the government officials are also negotiating with the IMF in Doha for revival of Extended Fund Facility (EFF) to get next loan tranche of one billion dollar. The government is also keen to get foreign exchange deposits from the friendly countries to build the foreign exchange reserves of the country.
Copyright Business Recorder, 2022