Positive change: Pakistan’s current account deficit shrinks to only $8 million

In September, Pakistan’s current account revealed a modest deficit of $8 million, as reported by the State Bank of Pakistan (SBP). 

Current Account Deficit (CAD) fell to $8 million in September 2023 compared to a deficit of $164 million in August 2023, and thus CAD improved by $156 million.https://t.co/q3LNv3HOB0https://t.co/Od8ikVvXrd#SBPBOP pic.twitter.com/DGXEyF6C37

— SBP (@StateBank_Pak) October 19, 2023

This marks a notable improvement from the $950 million deficit observed in July 2023, and a significant reduction compared to the $360 million deficit recorded in September of the previous year.

To provide additional context, in July of this year, Pakistan faced a more substantial current account deficit of $809 million, the highest since October 2022, according to SBP data. 

This figure, while lower than the $1.26 billion deficit in July 2022, sharply contrasts with June 2023 when the country enjoyed a surplus of $500 million in its current account.

In terms of trade, central bank data shows that Pakistan’s exports of goods and services dipped to $2.654 billion in July 2023, down from $2.743 billion in July 2022. 

Concurrently, total imports for July 2023 amounted to $5.03 billion, a decrease from the $6.07 billion recorded in the same period the previous year. In July of the preceding year, the trade balance in services registered a deficit of $32 million.

Furthermore, there was a noticeable decline in worker remittances, with a year-on-year drop of 19.28 per cent. On a monthly basis, remittances decreased by 7.32 per cent to $2.027 billion.