Pakistan’s current account deficit clocked in at $1.03 billion in March 2022, compared to $369 million recorded in the same period of the previous year, showed data released by the State Bank of Pakistan (SBP) on Saturday.
Updated figures of the SBP reveal that the current account deficit stood at $519 million in February 2022. Hence, the current account deficit for March 2022 is 98% higher on a monthly basis.
However, the SBP said a “turnaround in the current account” has continued as a deficit of $1 billion is lower than the average during FY22.
“Despite high global commodity prices, the turnaround in the current account continues, with a deficit of $1bn in Mar, $500mn lower than the average during FY22,” tweeted the SBP.
“Moreover, the non-oil balance remained in surplus for the 2nd consecutive month.”
Meanwhile, cumulatively, during the nine-month period of the ongoing fiscal year (July-March of FY22), the current account deficit stood at $13.17 billion compared to a deficit of only $275 million during the same nine months of the previous fiscal year (FY21), showed SBP data.
The current account balance is a key figure for Pakistan’s economy. A widening deficit in the current account leads to an outflow of dollars, which puts pressure on the currency that has continued to struggle against the greenback, falling to near the 187 level in the inter-bank market.
In March, Pakistan’s import bill continued to surge as the import of goods increased to $6.244 billion, up from $5.143 billion in February.
On the other hand, Pakistan’s exports of goods during the month of March stood at $3.072 billion, up from $2.888 billion in February.
Meanwhile, remittances during March 2022 stood at $2.81 billion, up by 3% YoY and 28% MoM.
As the country struggles to increase its foreign exchange reserves, the government has set eyes on a successful revival of the $6-billion International Monetary Fund’s (IMF) Extended Fund Facility (EFF), which would pave way for an inflow of at least a billion dollars.
A rollover of Chinese loans is also in the works.
However, with pending talks, SBP’s foreign exchange reserves have reached a critical level of under $11 billion.