Current account deficit declined by 68 per cent to $3.8 billion during the first eight months of the current fiscal year (FY23) from $12bn during the same period last year.
February showed a healthy sign as the CAD fell to just $74 million against $519m last year, the lowest monthly deficit recorded since February 2021. The deficit declined by 86 per cent on a year-on-year (YoY) basis.
The decline in the CAD was due to a fall in imports while no higher exports or inflows were noted. Though the balance of payment reflected a healthy sign for improvement in the external front of the country’s economy, the government is unable to meet even this decreasing CAD due to extremely poor foreign exchange reserves.
“On a YoY basis, the primary reason behind the decline in deficit was a 24pc fall in total imports. However, total exports and remittances also decreased by 19pc and 9pc YoY, respectively,” said Tahir Abbas, head of research at Arif Habib Limited told DAWN.
