ISLAMABAD - The current account deficit has narrowed down by 27 percent in the 10 months of the current financial year 2018-19, which is $4.2 billion lower than the deficit recorded in the last financial year. The reduction is mainly driven by import compression and a healthy growth in workers’ remittances.
According to the data updated by State Bank of Pakistan (SBP), the current account decreased to $11.5 billion in the period of July-March this year as against $15.8 billion last year.
The current account deficit in April grew by 42 percent when compared with March. 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 April 2018-19 financial year, with imports having declined 7.88 percent to $45.471 billion from $49.360 billion. Exports remained flat with a negligible 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.
Furthermore, the remittances inflow grew by 8.4 percent in the ten months of FY19 crossing a market of $17 billion. It played a major role in narrowing down the current account deficit .
Despite the improvement in the current account and a noticeable increase in official bilateral inflows, the financing of the current account deficit remained challenging.