Current account turns red in January

The first month of the second half of the current fiscal year posted a current account deficit (CAD) of $269 million, but the deficit shrank significantly in the first seven months of this year. The latest data issued by the State Bank of Pakistan on Monday shows that the current account changed its track from surplus to deficit, indicating a future trend. The current account was in surplus with $404m in December. However, compared to the January 2023 deficit of $167m, the deficit in January 2024 increased to $269m, another indicator of the rising trend of the deficit. The government expects a deficit of up to $6 billion at the end of FY24, but this trend could enhance that figure. The country is facing a serious problem of debt servicing and needs $6.1bn for debt servicing before the end of this fiscal year. This is also necessary to negotiate with the International Monetary Fund (IMF) for the next bailout package.