SB Reports Four-Fold Increase In Current Account Deficit Of Pakistan During July-Oct 2021

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State Bank Reports Four-Fold Increase In Current Account Deficit Of Pakistan During July-Oct 2021

ISLAMABAD ( JAVED MAHMOOD )

Pakistan’s current account deficit has increased four-fold in first four months of the ongoing financial year. During July-Oct FY22, the State Bank of Pakistan has reported 5.18 billion dollars current account deficit in comparison with just 1.21 billion dollars such deficit in the corresponding period of last fiscal year.

According to State Bank of Pakistan, the trade deficit of Pakistan widened to 14.84 billion dollars during July-Oct 2021 period of this fiscal, whereas in the corresponding period of last fiscal the trade deficit stood at 7.56 billion dollars. In other words, the trade deficit has expanded by almost 100 percent…..and surged to 14.84 billion dollars from 7.54 billion dollars in July-Oct period in 2020.

Pakistan has narrowly missed the exports target set for the first four months of this financial year. During Jul-Oct period of FY22, exports amounted to $9.49 billion against the quarterly target of $9.6 billion.

On an average, Pakistan earned $2.36 billion through exports which was below the expectations.

Trade deficit in first four months, nonetheless, surged beyond $15 billion as imports expanded to $25 billion while exports stood at only $9.46 billion during July-Oct period of this financial year.

Adviser to prime minister on commerce and trade Razzak Dawood himself has reported that the exports remained below the target in first four months of FY22.

In October 2021, the target of exports was also missed as exports increased to $2.47 billion, but missed the target of $2.6 billion.

However, in first four months the exports grew by 25%, mounting to $9.468 million as compared to $7.57 billion during Jul-Oct 2020. Pakistan’s exports in October 2021 grew by 17.5% to $2.471 billion — the highest ever export recorded in any Oct 2021.

An alarming issue is that the national imports expanded by 64 percent during Jul-Oct 2021 and increased to $25 billion as against to $15.2 billion during Jul-Oct 2020. Thus, in US dollars the imports surged by $10 billion. About 40% of this increase was investment-driven (capital goods, raw material and intermediates) which indicates expansion and enhanced activity by industry.