C/A deficit hits $162m in July

Pakistan posted a current account deficit (CAD) of $162 million in the first month (July) of the current fiscal year 2024-25, slightly exceeding market expectations and the average of the past 12 months, yet still remaining well within the targeted limit. The current account deficit occurred due to increased imports of goods to support economic activities and the apparent elevated repatriation of profit and dividends by foreign firms operating in Pakistan to their headquarters abroad. However, robust inflows of workers' remittances sent home by overseas Pakistanis and an uptick in export earnings, led by technology exports, partially offset the deficit, limiting it to $162 million for the month. According to data from the State Bank of Pakistan (SBP), the current account deficit was significantly reduced by 78% in July compared to $741 million in the same month last year. It also represents a 38% decrease compared to the previous month of June, which recorded a deficit of $313 million, marking the third consecutive month of a current account deficit.