Current account deficit widens by 60.87pc to $74 million in October

Pakistan posts current account deficit of $1.06b in July-October period of FY24

ISLAMABAD  -  Pakistan’s current account deficit was recorded at $74 million in October 2023. The current account deficit for October 2023 widened significantly by 60.87 percent on monthly basis and stood at $74 million compared to the deficit of $46 million in September 2023, according to latest data of State Bank of Pakistan (SBP). On an annual basis, the current account deficit showed an improvement of 91 percent, as the deficit stood at $849 million in the same month last year.

The country’s exports (goods and services) increased to $3.418 billion in October 2023 against $2.902 billion in October 2022, reflecting a jump of 18 percent. On the other hand, total imports lowered by 3 percent to $5.17 billion in October 2023 against $5.35 billion in the same period last year. The workers’ remittances improved by 11.55 percent on a monthly basis to $2.46 billion as compared to $2.21 billion in the previous month; while on a yearly basis, the remittances went up by 9.56% YoY as it stood at $2.25bn in October 2022.

Pakistan posted a current account deficit of $1.06 billion in July- October of FY24 as compared to a deficit of $3.1 billion during the same month of last fiscal year (FY23), depicting a massive decline of over $2 billion.

The ministry of finance had noted that it was expected that exports of goods and services for October 2023 will remain around $ 3.0 billion as observed in September and gradually take its increasing momentum in the coming months as LSM shows some turning point and posted growth of 8.4 percent in August on a monthly basis. On the other hand, imports are showing some fluctuations on a monthly basis and are expected to remain in the range of $ 4.0 - 4.5 billion in October as PKR is continuously appreciating against USD. Taking all these factors into account and with a positive outlook for remittances, the current account will continue to observe its improved monthly trend.

In its monthly report, the ministry stated that balance of payment (BoP) data for September 2023 reveals that exports of goods and services increased marginally by 0.6% on a MoM basis, while imports of goods and services decreased by 5.9%. In response to this, the trade deficit of goods and services declined by 15.6% on a MoM basis in the month of September. Moreover, recent administrative and regulative action for curbing illegal activities in the FX market has narrowed down the gap between interbank and open market exchange rates and worker’s remittances increased by 5.3% on a MoM basis. All these components have been reflected in the current account deficit, which decreased significantly by 95.1% on MoM basis and 97.8% on YoY basis.

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