News Desk
ISLAMABAD: Pakistan’s current account deficit shrank by more than 67 percent during the first 7 months of the ongoing fiscal year (FY23) due to a considerable decline in the import bill, with the negative gap during January alone recorded at 0.242 billion dollars, a decline of 90 percent on Year-on-Year (YoY) basis.
The data released by the State Bank of Pakistan (SBP) on Monday showed that Pakistan recorded a current account deficit amounting to 3.799 billion dollars in Jul to Jan FY23 compared to 11.558 billion dollars in the same period of the previous financial year, a decline of 7.75 billion dollars.
SBP said that the current account deficit recorded 0.2 billion dollars in January 2023 against a deficit of 2.5 billion dollars in January 2022.
Deficit comes as Pakistan moved to restrict imports
The deficit comes as Pakistan moved to restrict imports, curtailing the opening of letters of credit (LCs) for a variety of sectors much to the disappointment of businesses that rely on inward shipments for their activities.
It also comes at a time when the country’s foreign exchange reserves have shrunk to critical levels. Islamabad is currently engaged in negotiations with the International Monetary Fund (IMF) for the resumption of the stalled Extended Fund Facility (EFF) program, which has been deemed crucial.
Last week, talks between the IMF and Pakistan resumed virtually, as the two sides look to reach a deal to unlock funding critical to keep the country afloat.
But they could not reach a deal earlier this month and a visiting delegation of IMF departed Islamabad after ten days of talks. However, it said that dialogue would continue.
