Pakistan’s current account deficit hits two-year low

[ghazi52]

.,.,

Pakistan’s current account deficit hits two-year low​

Current account deficit declines 86% to $74mn in Feb, narrowly failing to turn around deficit into surplus

Salman Siddiqui
March 20, 2023

Pakistan's current account deficit (CAD) hit a two-year low of $74 million in a month, narrowly failing to turn around the country's deficit into surplus in February.

The government achieved the significantly low deficit through limiting imports to manage with low foreign exchange reserves and high risk of default on foreign debt repayments.

The low imports, however, slowed down economic activity next to nil and left millions of people jobless in the country.

State Bank of Pakistan (SBP) reported on Monday that "the current account deficit (was) recorded at $0.1 billion in February 2023 against 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 Jul-Feb FY22," said the central bank.

Securities brokerage firm Arif Habib Limited said in a brief commentary that "the primary reason behind the decline in deficit (CAD) was a 24% decline in total imports (compared to the same month of the last year)."

The country's current account deficit declined 86% to $74mn in February compared to a deficit of $519mn in the same month last year.

"This is the lowest monthly deficit (CAD) since February 2021," said Arif Habib Ltd.

However, total exports and remittances also decreased by 19% and 9% in the month, respectively, compared to the same month of last year.

In the first eight months (Jul-Feb) of the current fiscal year, the country’s deficit cumulatively decreased by 68% to $3.9bn compared to a deficit of $12.1bn during the same period last year.

Pakistan's foreign exchange reserves are estimated to be at $4.8bn at present after China refinanced $500mn last week.

The reserves, however, are barely enough for one month of import cover and not enough to make the due repayment of around $7bn over the next four months (Mar-June FY23).

Pakistan’s current account deficit hits two-year low | The Express Tribune

Current account deficit declines 86% to $74mn in Feb, narrowly failing to turn around deficit into surplus

tribune.com.pk

 

[Thəorətic Muslim]

Easy to do when you shut down all imports.

Can you post the other side of the story too where countries are being pissed off their exports to Pakistan are stuck in the port and rotting?

Was it Germany threatening Pakistan's GST+ for 4 cars being held up?

 

[epebble]

.,.,

Pakistan’s current account deficit hits two-year low​

Current account deficit declines 86% to $74mn in Feb, narrowly failing to turn around deficit into surplus

Salman Siddiqui
March 20, 2023

Pakistan's current account deficit (CAD) hit a two-year low of $74 million in a month, narrowly failing to turn around the country's deficit into surplus in February.

The government achieved the significantly low deficit through limiting imports to manage with low foreign exchange reserves and high risk of default on foreign debt repayments.

The low imports, however, slowed down economic activity next to nil and left millions of people jobless in the country.

State Bank of Pakistan (SBP) reported on Monday that "the current account deficit (was) recorded at $0.1 billion in February 2023 against 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 Jul-Feb FY22," said the central bank.

Securities brokerage firm Arif Habib Limited said in a brief commentary that "the primary reason behind the decline in deficit (CAD) was a 24% decline in total imports (compared to the same month of the last year)."

The country's current account deficit declined 86% to $74mn in February compared to a deficit of $519mn in the same month last year.

"This is the lowest monthly deficit (CAD) since February 2021," said Arif Habib Ltd.

However, total exports and remittances also decreased by 19% and 9% in the month, respectively, compared to the same month of last year.

In the first eight months (Jul-Feb) of the current fiscal year, the country’s deficit cumulatively decreased by 68% to $3.9bn compared to a deficit of $12.1bn during the same period last year.

Pakistan's foreign exchange reserves are estimated to be at $4.8bn at present after China refinanced $500mn last week.

The reserves, however, are barely enough for one month of import cover and not enough to make the due repayment of around $7bn over the next four months (Mar-June FY23).

Pakistan’s current account deficit hits two-year low | The Express Tribune

Current account deficit declines 86% to $74mn in Feb, narrowly failing to turn around deficit into surplus

tribune.com.pk

This is good news in a way. It shows it is possible to shrink consumption of imported goods and still manage to survive. If this continues, debt situation may become manageable.

 

[KaiserX]

This is good news in a way. It shows it is possible to shrink consumption of imported goods and still manage to survive. If this continues, debt situation may become manageable.

Next step should be to look into which exports are most effected by the import ban and possibly allowing certain imports which can be exported as value added goods.

Should be a gradual processess which should be heavily analyzed and scrutinized.

At the same time I know their is a pilot project on feasability of russian heavy crude oil. I hope this goes successfully as Pakistan can start benefitting from cheap russian oil to start cutting energy import bills. Would make the first task much easier as well.