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Pakistan’s current account deficit narrows to $1.1b in September


A general view of a container terminal is seen at Mundra Port, one of the ports handled by Indias Adani Ports and Special Economic Zone Ltd, in the western Indian state of Gujarat April 1, 2014. — Reuters/File
A general view of a container terminal is seen at Mundra Port, one of the ports handled by India’s Adani Ports and Special Economic Zone Ltd, in the western Indian state of Gujarat April 1, 2014. — Reuters/File
  • “A strong rebound in economic activity and higher int’l commodity prices kept CAD at an elevated level in Q1-FY22,” SBP reports.
  • During September, the balance of trade in goods recorded a deficit of 5.9% year-on-year.
  • Samiullah Tariq predicts that exchange rate depreciation will help curtail deficit to manageable levels.

Pakistan’s current account deficit — the gap between foreign payments and inflows — narrowed down to $1.47 billion in September 2021, somewhat in line with the market expectations.

The current account balance recorded a surplus of $27 million in the same period of last, the State Bank of Pakistan (SBP) reported on Tuesday.

In September, the deficit amounted to $1.11 billion. It was 24.48% lower than the deficit recorded in the previous month of August.

The data showed during 1QFY22, the country’s deficit reached $3.4 billion compared with a surplus of $865 million during the same period last year.

The central bank wrote on Twitter: “A strong rebound in economic activity and higher [international] commodity prices kept the [current account deficit] at an elevated level of $3.4 billion in Q1-FY22.”

Speaking to Geo.tv, Pakistan-Kuwait Investment Company’s Head of Research, Samiullah Tariq, said: “The current account deficit came towards the lower range of market expectations.”

According to the post-data commentary by Arif Habib Limited on a year-on-year basis, the primary reason behind the deficit was a 53% year-on-year increase in total imports to $6.7 billion.

However, the brokerage house added that total exports and remittances also increased by 31% and 17% year-on-year, respectively.

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Current account deficit trend. — AHL
Current account deficit trend. — AHL

Tariq mentioned that contraction in services deficit “was a positive surprise. Meanwhile, month-on-month exports have exhibited an increase, which is good.”

During September, the balance of trade in goods recorded a deficit of 5.9% year-on-year while for the services the deficit narrowed by 65.2% on a year-on-year basis.

Pakistan exported goods worth $2.64 billion compared to the imports worth $6.07 billion, while the value of exports of services clocked in at $551 million compared to $668 million in September last year.

The analyst predicted: “Hopefully exchange rate depreciation, along with other measures taken by the government and SBP, would help curtail deficit to manageable levels.”



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