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Current Account Closes FY20-21 With a Deficit of $1.8 Billion

Despite record receipt of exports and all-time high inflows of remittances, the current account posted a deficit of $1.8 billion to close the financial year 2020-21.

The external position is at its strongest in many years. In line with SBP projections, the current account deficit in FY21 fell to only 0.6% of the GDP. This is the lowest in 10 years, with exports and remittances at all-time highs.


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The current Account maintained a surplus-value till the 11th month of the outgoing financial year, with stability and encouraging signs for the economy but it surprisingly turned into a deficit in the last month of the financial year. Huge import bills due to higher values of petroleum products and purchase of Covid-19 vaccine translated into a huge gap in the balance of payment.

According to the State Bank of Pakistan (SBP), the current account deficit stood less than 58% or $2.5 billion in FY21, as compared to the deficit of $4.44 billion reported in the last financial year.

The trade deficit of goods is increasing every month which stood at $28.1 billion during July-June, as compared to $21.1 billion recorded in a similar period of last year, showing a $7 billion or 33% year-on-year increase. Hence, the overall trade deficit of goods and services settled above $30.3 billion in FY21 as compared to $24.4 billion recorded in the last financial year.

SBP | ProPakistani

On the other hand, the trade deficit of the services reduced to $1.87 billion during FY21 from $3.31 billion of the last year’s similar period, reducing by over 50% year-on-year. Hence, the overall deficit stood at $22.7 billion, showing an increase of 43% in deficit value.

Remittances maintained a robust growth where inflows surged to $29.3 billion during FY21, showing an increase of 26% or over $6.2 billion year-on-year. The consistent strong support from overseas Pakistanis through remittances shored up the current account level to retain surplus in the ten months of the current financial year.


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State Bank of Pakistan (SBP) projected earlier that the current account deficit of the country will stay up to 1% of the GDP.

The economic managers carried out their all-out efforts to close the financial year on a positive note and succeeded in achieving all-time high export values, remittances, and foreign exchange reserves. However, the current account deficit made a surprisingly negative end.

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