Friday, October 20, 2023
KARACHI: Pakistan's current account deficit narrowed to $8 million in September, a 98% drop from last year, as remittances from overseas Pakistanis and lower imports boosted the country's external balance, The News reported on Friday, citing State Bank of Pakistan data (SBP).
According to the data, Pakistan recorded a deficit of $360 million in September 2022. In September of this year, the current account deficit decreased by 95% month-on-month. The deficit was $164 million in August.
Despite the nominal deficit the country posted, analysts predicted a current account surplus.
"The improvement (in CAD) came mainly from higher remittances and lower imports," said Fahad Rauf, head of research at Ismail Iqbal Securities.
"Remittances are expected to increase further in October as the gap between the open market and the interbank market has been resolved," Rauf added. "We expect the CAD to remain low and could turn into surplus in October."
The country's trade deficit fell 46.85% to $1.518 billion in September, compared to $2.856 billion recorded a year earlier.
According to SBP data, Pakistan's total imports fell 19% year-on-year to $4 billion in September. While imports fell by 7% month-on-month.
With a 2% increase to US$2.474 billion in September from US$2.437 billion in September last year, total exports indicated a slight improvement. Exports in September increased by 2% month-on-month.
Remittances rose to $2.2 billion in September from $2.5 billion in the previous month. These inflows saw an 11% increase over the same month last year.
In the first quarter of this fiscal year, the country posted a current account deficit of $947 million, down 58% from a year earlier.
