The current account deficit has reduced to USD 1.13 billion in Septemberfrom USD 1.47 billion in August, according to a press release by theMinistry of Finance.
Overall, the deficit in the first quarter was reported at USD 3.4 billion,said the statement.
It is important to note that the surge in the import bill is due to thecombination of a few one-off imports and the rising global commodities andenergy prices.
Approximately, USD 400 million were spent on vaccines just in the month ofSeptember 2021, and overall, one billion dollars during the last quarter.Therefore, adjustment with vaccines import, the current account deficit forthe quarter has reduced to USD 2.4 billion.
Moreover, the sudden surge in the import bill is due to an abnormal surgein commodity prices. Energy prices, including oil, LNG, and coal prices,have witnessed a sudden rise. Whereas, chemicals, steel, and food priceshave also increased. However, with supply bottle-necks of theaforementioned items streamlined in the coming months, the burden on theimport bill would be reduced.
On the export front, a 12.5 percent increase on a month-on-month basis wasregistered in September, translating to USD 2.64 billion. In the firstquarter, exports recorded at USD 7 billion. It is expected that exportswill be close to USD 31 billion, with services exports at USD 6-7 billionin June ending 2022.
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Similarly, remittances are also on the right track and are expected to addUSD 32 billion to the national reserves. Remittances, and exports of goodsand services are currently expected to bring a combined revenue of USD 70billion in FY22.
Lastly, due to a better crop outlook, the import of sugar, wheat, andcotton will witness a massive slowdown during the second half of the fiscalyear. This will further reduce the imports and current account deficit.
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