Pakistan's Current Account Deficit Narrows to $1.16 Billion in 5-Month Period: SBP

The State Bank of Pakistan (SBP) announced on Monday that the Current Account Deficit (CAD) has witnessed a substantial decline, reaching $1.16 billion in the first five months of the current fiscal year. This marks a significant improvement compared to the deficit of $3.26 billion recorded during the same period last year.

In a social media post on X (formerly Twitter), the SBP highlighted the positive shift, stating, "Current Account Deficit improved significantly to $1.16 billion in July-November FY24, from $3.26 billion in July-November FY23." Examining the year-on-year basis, November 2022 saw a surplus of $9 million, a notable improvement compared to the deficit of $157 million in November 2023.

The latest figures from the SBP reveal that the merchandise trade deficit for July-November (2023-24) stood at $8,770 million, a substantial decrease from the $13,427 million deficit recorded in the same period the previous year. Similarly, the services' trade deficit for FY2023-24 was reported at $1,124 million, contrasting with the $317 million deficit in the corresponding period of the preceding year. The overall trade deficit in goods and services amounted to $9,894 million during the current fiscal year, showcasing an improvement from the $13,744 million deficit recorded last year.

Meanwhile, the balance on primary income showed a negative figure of $2,957 million, in contrast to the positive $1,951 million recorded last year, according to the SBP data.

The positive trend in the CAD reflects encouraging developments in Pakistan's economic landscape, contributing to a more favorable trade balance and overall economic stability.