Current account deficit falls 29% in 11 months – Details
- Current account deficit shrinks 29% to $12.68 Billion
- Growth in remittance inflows and the imports
- The export figures during May declined to $434 million on a yearly basis, from $455million
The current account deficit (CAD) decreased 29.9% and fell to $12.678 billion in July-May 2019, from $17.926bn in the same period last year.
In May, current account deficit plunged 47.19% to $1.089%, from $2.06billion. The primary contributor to the massive CAD was the balance of trade in goods and services.
The fall in the deficit is being credited to a contraction in growth in remittance inflows and the imports.
The Governor State Bank Pakistan Dr. Reza Baqir said that the current account deficit has remained one of the biggest challenges for the economy.
However, due to successful implementation, it has contracted significantly of economic plans by Pakistan’s economic team, he added.
These are amounted to $30.056billion during 11 months of the current fiscal year, from $34.209billion in the same month last year.
Fall in imports:
Fall in imports is the most important driver of the current account deficit. The value of imports dipped by 14.4% to $8.838billion in 11 months. Exports witnessed a negligible increase from $4.834billionto $4.892billion in the 11 months.
Export figures declined:
The export figures from May declined to $434 million on a yearly basis, from $455m. Imports posted a decrease of 20.18% to $910million as against $1.140billion in the corresponding month last year.
The current account deficit is one of the major problems that Pakistan had. The government has been trying to cut down the country’s massive CAD had crossed the $18billion-mark through a series of measures.
The data from the State Bank of Pakistan shows a drop in imports in the services sector; decreased by 14% to $8.83 billion. The import of goods also fell by 6% to $48.45 billion compared to 11 months ago.
Remittances sent from Pakistanis abroad have jumped by 10%. The remittances came after Pakistanis sent large amounts of money to their families to help deal with rising inflation.