ISLAMABAD: The current account deficit (CAD) of Pakistan has surged to $17.4 billion in FY2021-22.
The State Bank of Pakistan (SBP) today reported that the country recorded a CAD of $17.406 billion in FY2021-22 as compared to CAD just $2.82 billion in FY2020-21.
The massive CAD indicate the nature of balance of payments problem for Pakistan. The PML-N-led coalition government posted a CAD of $4.323bn in the April-June period of 2021-22, which was the second highest quarterly deficit of the fiscal year that ended on June 30.
The deficit of over $17.4 billion is more painful in the absence of inflows as loans while the commercial markets are not willing to accept Pakistan’s bonds due to higher risk of default.
The current account deficit has exceeded the SBP’s projection for the deficit in FY22 as it surged to 4.6 per cent of GDP in FY22, up from 0.8pc in FY21. In November 2021, the SBP issued its Annual Report in which it projected the current account deficit in the range of 2pc to 3pc of GDP during FY22.
The CAD in June FY22 was much higher than in May and it increased to $2.27 billion in June as against $1.43 billion in May. The CAD in June FY21 was $1.637bn.
The finance minister Miftah Ismail is repeatedly saying that Pakistan will receive IMF loan in few weeks, but with the passage of time, the trust deficit is rising. It is also evident from the currency market that reflects the trust deficit in the form of daily depreciation of Pakistani rupee. On Thursday, dollar edged up to over 238 rupees in the inter-bank and over 240 in the open market, setting new record.
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