Deficit was 131% higher on a monthly basis as it totalled $618mn in April 2022
The deficit in Pakistan’s current accounts peaked as $1.425 billion as of the end of May in 2022. This is compared to the $640 million deficit recorded during the same time period in last year. as per figures published from SBP. State Bank of Pakistan (SBP) on Tuesday
The latest figures from SBP have revealed that the SBP showed that current account surplus was around $618 million as of the beginning of April. Thus the deficit in current account of May 2022 has been 131% more on an annual basis.
The central bank noted that, while imports overall decreased in May compared to April, a drop in exports and remittances because of Eid holiday contributed to this increase.
“Moreover that, by excluding in kind imports that are fully funded and, therefore, do not impact the viability of the CAD The deficit was moderate at $1 billion” The central bank said.
However, in the aggregate, during the eleven-month stretch of the current financial year (July-May of FY22) this deficit was at $15.2 billion, as compared with the deficit of $1.183 billion in the same period in the prior budget year (FY21) as per SBP figures.
The balance of the current account is a crucial indicator for the economy of Pakistan. An increasing balance in this account could lead to a decrease in dollars, which put stress on Pakistan’s currency which continues to fight against the greenback.
In a first-of-the-morning development, Pakistan received combined economic and financial goals for the seventh and eighth evaluations in its IMF bailout plan, as per Financial Minister Miftah Ismail.
Through Twitter, Miftah said the government had received the lender’s Memorandum of Economic and Financial Policies (MEFP) for both reviews after meetings last week between the two sides.
The government is seeking to reach an arrangement with the financial monitor to revive the $6 billion plan prior to the acceptance of the Federal Budget 2022-23. The government must have the budget approved before the 28th of June.
The IMF program is widely regarded as essential for Pakistan’s business, which had to contend with rising inflation and an increasing deficit in the current account. The decline has led to the rupee to fall to record lows multiple times throughout the course of the year, including almost 15% decline this calendar year.