Current account posted a $773-million deficit during the first month of the current fiscal year (FY22) due to a higher import bill.
The country’s goods import payments increased significantly by 51 percent to $5.396 billion in July 2021 compared to $3.557 billion July 2020. The higher import bill turned the current account into deficit. The country’s imports are increasing due to pick-up in domestic activity and higher global commodity prices and vaccine imports to deal with Covid-19 pandemic.
The State Bank of Pakistan (SBP) on Friday reported that the country recorded a current account deficit of $773 million in July 2021 compared to a $583 million surplus in July 2020. However, on a month-on-month basis the current account deficit declined 52 percent in July 2021 as against June 2021, in which the current account deficit was $1.619 billion.
According to SBP, the deficit, in the first month of this fiscal year, is in line with SBP’s expectations of a current account deficit of 2-3 pct of GDP for FY22 as economic activity continues to progress.
