KARACHI: The country’s current account fell sharply, ie, 78 percent during the first month of this fiscal year (FY25) supported by healthy home remittances inflows.

The State Bank of Pakistan (SBP) on Monday reported a significant improvement on external account with a massive decline in the current account deficit. Pakistan recorded a current account deficit of $162 million in July 2024 compared to a $741 million deficit in July 2023, depicting a decline of $579 million.

In addition, the current account deficit in July 2024 is also some 48 percent lower than June 2024, in which it was $313 million.

June remittances soar 44.4pc YoY

Analysts said that the reduction in the deficit is largely attributed to a healthy 48 percent YoY growth in the home remittances. The country received home remittance inflows amounting to $3 billion in July 2024 compared to $2.029 billion in July 2023.

In addition, goods exports increased by 13 percent to reach $3 billion in the first month of this fiscal year compared to the same period of the last fiscal year. The country’s imports bill surged by 16percent to $4.819 billion in July 2024.

The balance on primary income deficit increased to $ 727 million, reflecting a 25 percent increase YoY.

Economists have termed this trend a positive indication for the cash strapped Pakistan’s economy and said that this will help to release the pressure on the external account.

They said Pakistan is struggling to bring more foreign inflows from the IMF and other international financial institutions to ensure the timely payment of external debt and build the country’s foreign exchange reserves.

Copyright Business Recorder, 2024