ISLAMABAD: The country’s current account posted a $773-million deficit in July 2021 compared to deficit of $1.6 billion in June 2021 and a surplus of $583 million in July 2020.
“This deficit is in line with SBP’s expectations of a current account deficit of 2-3 percent of Gross Domestic Product (GDP) as economic activity continued to progress,” the State Bank of Pakistan (SBP) said on its official twitter account.
It added that despite the recent increase in current account deficit, the SBP’s foreign reserves position continued to strengthen on monthly basis. “This is in contrast to past trends and is supported by country’s market-based exchange rate system,” it added.
According to the data released by the SBP, exports of goods and services were higher compared to July 2020 as they rose to $2.74 billion in July 2021 from $2.34 billion in same month of last year.
The increase in current account deficit was mainly attributed to higher imports during the month. However some of the major imports were seasonal such as COVID vaccine or heavy machinery to be used in industrial units in the country.
At over $17 billion, Pakistan’s foreign exchange reserves have risen to a 4.5 year high in June. They rose by $5.2 billion during FY21. Conversely, during FY17 and FY18, they fell by $2 billion and $6.4 billion, respectively.
The data showed that the CAD without official transfers expanded to $827 million compared to the surplus of $565 million in same period of last year. In addition, the trade deficit in goods expanded from $1.672 billion in July 2020 to $3.14 billion in July this year.
