The current account recorded a significant deficit of $17.4 billion for thefinancial year 2021-22 (FY22) as against $2.82 billion reported during thefinancial year 2020-21 (FY21), stated the State Bank of Pakistan (SBP).
This is primarily due to the high trade deficit, which was impacted by theimport bill as the prices of petroleum products and food items skyrocketed.
During the FY22, the trade deficit of goods increased to $39.5 billion ascompared to $28.6 billion reported in FY21.
The imports of goods increased to $72 billion whereas the exports surged to$32 billion.
The trade deficit of services stood at $5.1 billion in FY22 versus $2.5billion reported in FY21. The services imports also surged to $12 billionas against exports of $6.9 billion.
Remittances, on the other hand, increased to $31.2 billion in FY22 asagainst $29.4 billion reported in FY21. The remittances recorded anall-time high inflow, but their impact is limited on the current accountdeficit.
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A surge in oil imports saw CAD rise to $2.3 billion in June despite higherexports and remittances. So far in July, oil imports are much lower and thedeficit is expected to resume its moderating trajectory.
In June, 3.3 million metric tons of oil was imported, 33 percent higherthan in May. Coupled with higher global prices, this doubled the oil importbill from $1.4bn to $2.9bn. By contrast, non-oil imports declined.
In June, the current account deficit stood at $2.275 billion as compared to$1.4 billion reported in the same month of the previous financial year. Thedepreciation of the Rupee against the Dollar has also caused a steepincrease in the current account deficit.link