ISLAMABAD – The current account deficit has narrowed down by 27 percent inthe 10 months of the current financial year 2018-19, which is $4.2 billionlower than the deficit recorded in the last financial year. The reductionis mainly driven by import compression and a healthy growth in workers’remittances.
According to the data updated by State Bank of Pakistan (SBP), the currentaccount decreased to $11.5 billion in the period of July-March this year asagainst $15.8 billion last year.
The current account deficit in April grew by 42 percent when compared withMarch. It increased to $1.24 billion from $822 million in March and from$278 million in the preceding month of February.
The trade deficit fell 12.82 percent to $26.302 billion in July to April2018-19 financial year, with imports having declined 7.88 percent to$45.471 billion from $49.360 billion. Exports remained flat with anegligible growth of 0.12 percent in 10 months of this financial year at$19.169 billion compared with $19.191 billion in the same period last year.
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Furthermore, the remittances inflow grew by 8.4 percent in the ten monthsof FY19 crossing a market of $17 billion. It played a major role innarrowing down the current account deficit.
Despite the improvement in the current account and a noticeable increase inofficial bilateral inflows, the financing of the current account deficitremained challenging.
