Current account deficit narrows by 78 per cent in July 2024: SBP report

ISLAMABAD: Pakistan’s current account deficit narrowed significantly in July 2024, registering at $162 million.

This represents a substantial 78 per cent decrease from the $741 million deficit recorded in the same month the previous year, according to data released by the State Bank of Pakistan (SBP) on Monday.

Topline Securities noted that the deficit was higher than anticipated due to a trade deficit of $2.4 billion reported by the SBP, in contrast to the $1.97 billion deficit recorded by the Pakistan Bureau of Statistics (PBS).

The brokerage house highlighted that SBP’s deficit figures are generally lower than those reported by PBS.

In July 2024, Pakistan’s total exports of goods and services reached $3.013 billion, marking an 11 per cent increase from $2.706 billion in July 2023. Conversely, imports surged to $5.6 billion, representing a 12 per cent rise year-on-year.

Worker remittances for July 2024 totalled $2.995 billion, reflecting a 48 per cent increase compared to the previous year.

The substantial reduction in the current account deficit has been attributed to low economic growth and high inflation, which have suppressed demand. Additionally, increased exports, elevated interest rates, and import restrictions have contributed to the tighter deficit.

Month-on-month, the current account deficit decreased by 48 per cent in July 2024, down from a revised deficit of $313 million in June 2024, as per the SBP data.

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