Home Latest News Pakistan Current Account Deficit Hits Record-high of $2.6 billion

Pakistan Current Account Deficit Hits Record-high of $2.6 billion

by Staff Report

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State Bank of Pakistan claims figure inflated by approximately $1 billion in imports that are ‘fully financed’

Pakistan’s current account deficit for the month of January was recorded at a record-high of $2.6 billion, with the State Bank of Pakistan (SBP) attributing this due to a surge in import payments due to rising commodity prices globally.

According to the central bank, the CAD—the gap between the country’s foreign expenditure and income—rose to $2.6 billion from $1.9 billion a month earlier. It said this was “largely due to imports in kind that are fully financed.” Excluding those imports, it claimed, the deficit would have been around $1 billion lower in the month of January.

The highest current account deficit reported in a single month prior to last month was in July 2018 at $2.1 billion; that year, the country faced a record $20 billion current account deficit.

According to the data provided by the central bank, the largest portion of the import bill remains petroleum products, whose impact has increased due to a surge in global prices. However, services imports also increased by 39 percent to $6.174 billion, compared to $4.426 billion in January 2021.

Overall, the apex bank’s data shows that the country’s current account deficit for the seven months of the current fiscal stands at $11.6 billion, compared to a surplus of $1.028 billion during the same period in the previous fiscal.

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