Pakistan’s current account records $269 million deficit

WEB DESK: In a notable economic shift, Pakistan’s current account reported a deficit of $269 million for January 2024, diverging sharply from the $404 million surplus recorded in December 2023, according to data released by the State Bank of Pakistan (SBP) on Monday.

This deficit was primarily influenced by a minor month-on-month decrease in the country’s exports coupled with a significant uptick in imports.

SBP data reveals that Pakistan’s exports, encompassing both goods and services, amounted to $3.37 billion in January 2024, down over 4 per cent from $3.526 billion in December 2023.

Conversely, remittances during the same period saw a modest increase, reaching $2.397 billion compared to $2.382 billion in December 2023, marking a 1 per cent growth.

Meanwhile, the nation’s total imports surged by 11 per cent to $5.51 billion in January 2024, compared to $4.96 billion in the corresponding period last year.

It is noteworthy that Pakistan faced a current account deficit of $167 million in January 2023.

However, on a cumulative basis for July–January of FY24, the country recorded a current account deficit of $1.093 billion, showcasing a substantial 71 per cent decrease from the $3.796 billion deficit during the same period in the previous fiscal year (FY23).

The State Bank of Pakistan, during its recent Monetary Policy Committee (MPC) meeting on January 29, highlighted the improvement in the country’s external account position.

SBP Governor Jameel Ahmad acknowledged the positive trend, stating, “Despite payments of $6.2 billion, foreign exchange reserves have improved, and our current account deficit has also narrowed.”

The current account holds particular significance for Pakistan, which is heavily reliant on imports to sustain its economy.

A widening deficit not only exerts pressure on the exchange rate but also depletes official foreign exchange reserves.

The SBP’s efforts to address and rectify this imbalance appear to be yielding positive results, as indicated by the recent data.

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