State Bank of Pakistan reported that “the current account deficit (was) recorded at $ 0.1 billion in February 2023 against a deficit of $ 0.5 billion in February 2022.
Islamabad,UPDATED: Mar 21, 2023 02:18 IST
Pakistan Shehbaz Sharif. (File Photo)
By Press Trust of India: Curbs on imports by Pakistan began to yield results as the cash-strapped country’s current account deficit (CAD) hit a two-year low of $ 74 million in a month, it emerged on Monday. The State Bank of Pakistan (SBP) reported that “the present account deficit (was) recorded at $ 0.1 billion in February 2023 in opposition to a deficit of $ 0.5 billion in February 2022.
“Cumulatively, CAD was reduced to $ 3.9 billion in (eight months) Jul-Feb FY23 compared to a deficit of $ 12.1 billion in July-Feb FY22,” mentioned the central financial institution.
The CAD was being managed by decreasing imports because of the low degree of international trade reserves, retaining the nation on the margin of defaulting on exterior liabilities. However, consultants have warned that cuts in imports would decelerate financial development and improve unemployment and poverty.
The Express Tribune newspaper reported that securities brokerage agency Arif Habib Limited mentioned in a quick commentary that “the primary reason behind the decline in deficit (CAD) was a 24 per cent decline in total imports (compared to the same month of last year).”
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The nation’s present account deficit declined 86% to $74mn in February in comparison with a deficit of $ 519mn in the identical month final 12 months.
“This is the lowest monthly deficit (CAD) since February 2021,” mentioned Arif Habib Ltd. But complete exports and remittances additionally decreased by 19 per cent and 9 per cent within the month, respectively, in comparison with the identical month of final 12 months. In the primary eight months (Jul-Feb) of the present fiscal 12 months, the nation’s deficit cumulatively decreased by 68 per cent to $ 3.9 bn in comparison with a deficit of $ 12.1bn throughout the identical interval final 12 months.
Pakistan is scrambling to extend its reserves that are estimated to be at $ 4.8 billion after China refinanced $ 500 million final week. Earlier, a Chinese financial institution offered $ 700 million to Pakistan. Despite a slight enchancment within the reserves, the scenario continues to be grim because the nation must pay $ 7 billion by June this 12 months, making additional borrowing vital. Efforts to safe a mortgage from the International Monetary Fund have been unsuccessful thus far, which is predicted to open avenues for additional borrowing from the worldwide market or getting loans from pleasant international locations.
Published On:
Mar 21, 2023
