Current account gap narrows to $74m

The current account deficit (CAD) narrowed year-on-year by 91 per cent in October but it widened on a month-on-month basis. The latest data issued by the State Bank of Pakistan (SBP) on Monday shows the deficit remained within the estimate of the bank. Last week, the SBP governor said that CAD would remain well below $100m in October and expected that it would be well-contained in 2023-24. The data shows that the CAD was $74 million in October compared to $849m in the same month last year, a contraction of 91.2pc. This is in line with the SBP’s policy despite the ease in the import restrictions. The IMF again emphasised in the recent review before reaching a Staff-Level Agreement with Pakistan for the release of the second tranche under the nine-month $3bn Stand-By Arrangement to open up imports which would certainly increase the trade deficit and ultimately the CAD. The CAD was drastically slashed by 87pc in FY23 by imposing a strict ban on most of the imports.