Current account deficit reduced by more than 38% during April

According to data released by the State Bank of Pakistan (SBP), the current account deficit narrowed 38.6% to 623 million in April on a mont...

According to data released by the State Bank of Pakistan (SBP), the current account deficit narrowed 38.6% to 623 million in April on a monthly basis.

According to the Dawn newspaper, the growing current account deficit has been one of the biggest economic problems of the current financial year. The dollar was 25 times higher than the 543 million deficit recorded in the same period last fiscal year.

The latest figures show that the current account deficit was 2.82 billion in 2020-20, up from  4.45 billion last year. The highest was recorded at ارب 2.53 billion.

The unpredictable current account balance is mainly due to the extraordinary increase in imports which reached 69 69 billion in July-April.

Rising imports outpaced growth in exports, which reached ارب 32.6 billion during the same period, with trade imbalances contributing the most to widening the current account deficit over a 10-month period.

Also read: Current account deficit rises to 632 million in May

The new government has recently banned the import of 32 items to reduce the outflow of dollars. The rising import bill is due to the rise in oil prices in the international market. The oil bill has more than doubled.

Experts say that the import bill can be reduced to some extent through the recent import restrictions. However, the pre-booked items will continue to reach Pakistan even after the end of the current financial year. Do not incur current account deficit.

Earlier, analysts had estimated that the current account deficit for 2012-13 could be between 15 billion and 16 billion.

When the recently ousted PTI government came to power in 2018, the annual gap was about ً 20 billion. The poor current account balance forced Imran Khan government to seek help from friendly countries and donor agencies. Meanwhile, it also borrowed funds from the market at commercial rates.

Read more: Current account surplus of 773 million in 10 months of current financial year

The current account is likely to remain in deficit until the government successfully completes negotiations with the International Monetary Fund for a ارب 1 billion loan installment, as well as other sources of credit to Pakistan. Will agree to the loan.

The country is currently unable to issue bonds in the international market due to weaknesses in its external accounts, which is reflected in the massive depreciation of the rupee against the dollar, the value of the local currency during the current financial year. I have lost more than 20%.