Tuesday, April 23, 2024

Current Account Records a Huge Deficit of $662 Million in December

A current account deficit of $662 million was reported in Pakistan in December, after remaining in surplus for the last five months, largely on the back of higher imports, central bank data showed on Wednesday.

Cumulatively, the current account remained in surplus over the six months of the current fiscal year and stood at $1,131 billion, compared with a deficit of $2,032 billion in the same time period of last fiscal year.

In November, the country reported a current account surplus of $513 million, while in December 2019, it announced a small deficit of $287 million.

In December, imports rose 32 percent year-on-year to $5,019 billion. However, exports rose 6.78 percent to $2.251 billion. Economic activity is gaining traction, which is apparent from the fact that the Large Scale Manufacturing Index (LSM) grew 14.45% in November, while the index grew 7.4% year-on-year cumulatively in the five months of the current fiscal year.

Recent Temporary Economic Refinance Facility (TERF) figures have also shown investment and economic activity recovered from the decline caused by coronavirus.

Analysts said the monthly import bill would swell in the future, but it was unlikely that the current account would reach 0.8 percent of GDP this fiscal year overall.

Due to accelerating manufacturing activities, improvement in aggregate demand and new investments, the LSM index is expected to remain upbeat.

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