The Current Account recorded a deficit of $200 million in the month of April due to a high import bill in the outgoing month, according to data reported by the State Bank of Pakistan (SBP).
The current account deficit of April 2021 is 61 percent lower than it was in April 2020. However, the current account had maintained a surplus position that stood at $800 million during the first 10 months of the current financial year 2020-21, a significant turnaround from the deficit of $4.7 billion during the same period last year.
With the economy rebounding strongly in FY21, imports are picking up but are being offset by unprecedented growth in remittances and recovery in exports. With the CAB contained and the foreign exchange reserves at a four-year high, the economic revival is on sound and sustainable footing.
1/2 Current account balance (CAB) posted a small deficit of $200mn in Apr21, 61% lower than in Apr20. Through the first 10mths of FY1, CAB remains in surplus of $800mn, a significant turnaround from the $4.7bn deficit during the same period last year. See https://t.co/Od8ikVvpBF pic.twitter.com/1DsgFTMCqC
— SBP (@StateBank_Pak) May 25, 2021
A.A.H Soomro, Managing Director at Khadim Ali Shah Bukhari Securities, told Propakistani,
Good numbers continue this month as well. The next few months are sorted. Don’t see SBP needs to change the stance yet
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The trade deficit of goods is increasing every month after being at $21.3 billion during July-April as compared to $17.5 billion recorded in the corresponding period last year.
On the other hand, the trade deficit of the services had reduced to $1.4 billion during July-April from $3.02 billion of the last year’s corresponding period. Hence, the overall deficit stood at $22.7 billion, showing an increase of 10 percent in the deficit values.
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The remittances maintained a robust growth with inflows that had surged to $24.24 billion during July-April, showing an increase of 18 percent or $3.77 billion year-on-year. The consistent strong support from overseas Pakistanis through the remittances shored up the current account level to retain a surplus in the ten months of the current financial year.
The current account made and broke various records in the current financial year, and it is expected that it will close the year with a surplus level.
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