By Current Account Deficit Overview Pakistan’s current account recorded a deficit of $162 million in July 2024, a significant decrease of 78% compared to the $741 million deficit in July 2023. The data, released by the State Bank of Pakistan (SBP) on Monday, shows that while the deficit has improved on a yearly basis, it was higher than expected due to an increased trade deficit.
Trade Deficit and Economic Impact The SBP reported a trade deficit of $2.4 billion in July 2024, exceeding the $1.97 billion deficit reported by the Pakistan Bureau of Statistics (PBS). This discrepancy in figures contributed to the higher-than-anticipated current account deficit. Typically, SBP’s deficit figures are lower than those reported by PBS.
Export and Import Figures In July 2024, Pakistan’s total export of goods and services was $3.013 billion, marking an 11% increase from $2.706 billion in the same month of the previous year. Imports rose by over 12% to $5.6 billion. Despite a rise in imports, worker remittances reached $2.995 billion, an increase of 48% from the previous year.
Monthly Deficit Trends On a monthly basis, the current account deficit decreased by 48% from a revised deficit of $313 million in June 2024. July’s exports were down by 2% compared to June, and imports saw a slight reduction of 1.3%.
Economic Implications The current account deficit remains a critical concern for Pakistan, which depends heavily on imports. A widening deficit can exert pressure on the exchange rate and deplete foreign exchange reserves. The lower deficit in July is attributed to increased exports, high interest rates, and import restrictions, which have helped in managing the deficit more effectively.
