KARACHI: For the second consecutive month, Pakistan has posted a current account surplus in April 2023 mainly due to a lower import bill.

The State Bank of Pakistan (SBP) on Tuesday reported that the country posted a current account surplus of $18 million for the month of April 23 compared to a deficit of $640 million during April 22. For the second consecutive month, the current account was in surplus; however, the surplus in April 23 is less than the previous month of March 23, in which the current account posted $750 million.

The decline in surplus is mainly due to lower home remittance inflows in April 23. The country received $2.5 billion workers’ remittances during March 23 due to Eid and Ramzan. While home remittances inflows during April 23 were $2.2 billion.

Pakistan reports massive current account surplus of $654mn in March

On a YoY basis, the primary reason behind the surplus was a 38 percent YoY decline in total imports. However, total exports and remittances also decreased by 32 percent YoY and 29 percent YoY, respectively.

Cumulatively, during the first ten months of this fiscal year, the current account deficit narrowed by 76 percent. According to SBP, Pakistan recorded a current account deficit of $ 3.258 billion in July-April of FY23 compared to $13.654 billion in the same period of last fiscal year (FY22), depicting a decline of $10.39 billion.

Analysts said that the federal government has taken a number of measures to curtail the import bill to save the foreign exchange reserves, which stood at $4.4 billion. Accordingly, the goods trade deficit fell by 23 percent during the first ten months of this fiscal year. With $23.211 billion exports and $45.202 billion imports, the country’s total goods trade deficit fell to $22 billion during July-April of FY23 as against $31.847 billion in corresponding period of last fiscal year.

Pakistan has been facing a serious crisis of foreign exchange for the last one year and the government is making efforts to bring more foreign inflows to reduce the pressure on external accounts.

Talks with the IMF for the release of a $1 billion tranche of Extended Fund Facility (EFF) program were completed in February, however staff level agreement still has not materialised for the release of the loan tranche.

Copyright Business Recorder, 2023