Pakistan's Current Account Records $74 Million Deficit in October 2023

Breaking down the data, the SBP highlighted a substantial 18% rise in the country's exports (goods and services) to $3.418 billion in October 2023, compared to $2.902 billion in October 2022. Conversely, total imports experienced a 3% reduction, totaling $5.17 billion in October 2023 compared to $5.35 billion in the same period last year.

Analyzing the broader fiscal picture, Pakistan's current account deficit for July-October of FY24 stood at $1.06 billion. This reflects a significant improvement compared to the $3.1 billion deficit recorded during the same period in the last fiscal year (FY23), showcasing a substantial decline of over $2 billion.

Current Account Deficit improved significantly to $1.1 billion during Jul-Oct FY24 compared to $3.1 billion during Jul-Oct FY23.https://t.co/q3LNv3HOB0https://t.co/Od8ikVvXrd#SBPBOP pic.twitter.com/KBpk8Zeonx — SBP (@StateBank_Pak) November 20, 2023

The State Bank of Pakistan, during its recent Monetary Policy Committee (MPC) meeting on October 30, highlighted a noteworthy 58% year-on-year reduction in the current account deficit, which amounted to $947 million in Jul-Sep FY24. This trend continued, almost leveling out in September 2023.

For Pakistan, heavily reliant on imports to sustain its economy, the current account balance is a crucial indicator. A shrinking deficit eases pressure on the exchange rate and preserves official foreign exchange reserves, currently standing at just over $7.6 billion according to the latest available data.