SBP reports a current account surplus for the second consecutive month in March 2023, but it falls to $18 million
The State Bank of Pakistan today released the latest balance of payment position, showing the current account surplus for the second consecutive month in March 2023.
The current account surplus, however, has shrunk to a mere US$18 million in March 2023 as against US$484 million in Feb 2023.
The CAD for the first nine months of the ongoing fiscal year, July 2022 to March 2023, fell to $3.54 billion, from $13.94 billion in the corresponding period of the last financial year. Thus, in the US dollar, the CAD has declined by more than $10.4 billion during July-March FY2023.
The sharp improvement in the balance of payment position of Pakistan is the outcome of restrictions on imports. The government restricted imports amid a shortage of foreign exchange reserves driven by a delay in a deal with the IMF. Though Pakistan has fulfilled all the required measures, IMF has yet not signed the agreement for the resumption of a bailout package.
In the first nine months of this financial year, the imports have declined to $45.2 billion, from $58.7 billion in the comparative period of last fiscal year. Thus, the imports showed a more than $13 billion decline in this period.
Exports of the country also fell to $23.11 billion in this fiscal as against $26.85 billion in the same period a year ago.
The trade deficit in this fiscal also fell to $22.4 billion as against $36.5 billion in the same period last fiscal year. In the trade deficit, Pakistan has seen a relief of $14 billion from July 2022 to March 2023 period.
Unfortunately, the quantum of the trade deficit is equal to the inflows of remittances overseas Pakistanis send to their motherland in this fiscal year.
The remittances showed a decline of about $2.7 billion in the ongoing financial year when compared with the previous fiscal year.