KARACHI: Pakistan’s current account posted a surplus for the second consecutive month in April due to reduced imports, data released by the State Bank of Pakistan (SBP) showed Tuesday.
The country posted a surplus of $18 million this month compared to a current account deficit — the gap between a country’s expenditures and income — of $640 million last year.
In March, the current account was in surplus for the first time since November 2020 and clocked in at $654 million — the highest since February 2015.
Overall, in the 10 months of the current fiscal year, the current account deficit came in at $3.25 billion, declining 76% compared to $13.65 billion during the same period last year.
According to the SBP data, the import of goods fell 38% year-on-year to $3.7 billion in April. On the other hand, exports also fell 33% to $2.11 billion.
Meanwhile, remittances also decreased 29% to $2.2 billion.
As the country’s foreign exchange reserves fell to critically low levels last year, the government decided to restrict imports to “essential items”. While some of the restrictions have since been eased, companies across all sectors have complained that banks are not opening letters of credit (LCs). Several manufacturers, especially in the automotive sector, have temporarily shut down plants citing inventory shortages.
Meanwhile, international institutions — the International Monetary Fund (IMF), World Bank and Asian Development Bank — have slashed Pakistan’s growth forecasts, projecting that the economy would grow between 0.4% to 0.6% this fiscal year.
The country’s foreign exchange reserves have declined to $4.38 billion as of May 5, which is not sufficient to cover even a month’s imports.
The country is scrambling to revive a crucial loan programme with the IMF, without which the country risks default as its reserves deplete to a critical level.
