The country’s current account has been showing a monthly deficit since December 2020, but in the first 10 years of the fiscal year 2020-2021, it remained at a surplus of $773 million, reflecting additional support for remittances and exports.
According to the report, the latest State Bank of Pakistan (SBP)’s data show that the current account deficit narrowed by about 61% to $200 million in April from $510 million in the same period last year.
As a result, a surplus of $773 million during the 10 months of the fiscal year 2021 has changed the government’s economic position, which is trying to reduce the current account deficit to $20 billion, the highest ever in the fiscal year 2018.
Now, if there is a deficit in the remaining 2 months of the financial year (May and June), the current account of the financial year 2021 will end with a surplus.
Recently, the SBP said that the country has a current account surplus after 17 years, which will help the economy to recover from the pressure caused by the long-running deficit.
The current account deficit in the fiscal year 2020 was $4.657 billion, which has turned into a surplus during the same period of the current financial year, which has helped the economy to stabilize in the face of external factors such as foreign exchange and stable exchange.
Read more: Current account turned negative in December after 5 consecutive months of surplus
In the July-April period of the current financial year, Pakistan’s trade deficit increased by 21.6 per cent to $23.83 billion. Despite this, the country managed to maintain a current account surplus.
In the fiscal year 2020, the country’s trade deficit was $19.59 billion.
Rising imports helped create more export products and create more economic activity.
Government officials say higher imports contributed to economic growth, which, according to the National Accounts Committee, will be 3.94 per cent in the fiscal year 2021.
During the first ten months of the current financial year, exports increased by 13.5 per cent to 20 20.9 billion from $18.4 billion during the same period last year.
However, during July-April, imports increased by 17.7% to $44.7 billion, showing a trade deficit of $23.8 billion.