ISLAMABAD    -   Pakistan’s current ac­count deficit has re­markably shrunk by 42 percent in August mainly due to the mea­sures taken by the gov­ernment to curtail the imports of the country. 

The current account deficit (CAD) has been recorded at $0.7 billion in August this year as compared to $1.2 bil­lion in July showing decline of 42 percent. “Current Account Defi­cit (CAD) fell to $0.7 billion in August com­pared to $1.2 billion in July. Cumulatively, Jul-Aug FY23 CAD de­clined by $0.5 billion to $1.9 billion compared to the same period last year mainly due to in­crease in exports by $0.5 billion & contrac­tion in imports by $0.2 billion,” said State Bank of Pakistan in a brief statement on twitter on Thursday. The in­cumbent government has adopted the policy to curtail the soaring imports, which had gone to highest ever $80 billion in the pre­vious fiscal year. Pakistan posted a massive current account deficit of $17.3 billion in the previous fiscal year. Initially, the government had imposed ban on the import of luxu­ry and non-essential items. Howev­er, later, it had lifted ban on all other items excluding import of vehicles mobile phones and some others. The Ministry of Finance and SBP are following tight monetary policy, fis­cal consolidation and some tempo­rary administrative measures.

The SBP data showed the balance of trade in goods and services also declined by 0.54 percent month-on-month to $3.298 billion. During August, imports of goods stood at $5.75 billion, compared to $5.35 bil­lion in the preceding month. On the other hand, exports increased sig­nificantly to $2.81 billion, jumping 23.38 percent from $2.28 billion in July. Workers’ remittances clocked in at $2.72 billion compared to $2.52 billion in the previous month.

Cumulatively, the country re­corded a current account deficit amounting to $1.92 billion in first two months (July-August) of FY23 compared to $2.374 billion in the same period of last fiscal year, de­picting a decline of $456 million. During the first two months of this fiscal year, imports recorded a de­cline of $240 million to $11.98 bil­lion. However, exports posted an increase of $519 million to $5.093 billion in 2 months.