Tag: CAD

PM Shehbaz urges IMF to release stalled funds, assures compliance with conditions

On Thursday, Prime Minister (PM) Shehbaz Sharif had a meeting with Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), where he urged the lender to release the stalled funds for Pakistan. He assured the IMF of Pakistan’s compliance with all the conditions set by the lender.

The meeting took place during the Summit for a New Global Financial Pact held in Paris, emphasising Pakistan’s commitment to fulfilling its promises.

During the meeting, the two leaders discussed the ongoing programmes and cooperation between Pakistan and the IMF. The prime minister briefed Georgieva on Pakistan’s economic outlook, highlighting the government’s efforts for economic growth and stability.

He emphasised that all the necessary actions for the 9th review under the Extended Fund Facility (EFF) had been completed, and Pakistan was fully dedicated to meeting its obligations as agreed with the IMF.

The prime minister expressed his hope for the timely release of the funds allocated under the EFF, as it would contribute to Pakistan’s ongoing efforts in economic stabilisation and provide relief to the people.

Georgieva shared the IMF’s perspective on the ongoing review process and acknowledged the meeting as an opportunity to assess the progress made in that context.

It is crucial to note that Pakistan’s currency reserves are currently sufficient to cover only one month’s worth of imports. The country had expected $1.1 billion of the funds to be released in November, but the IMF has imposed certain conditions before making further disbursements.

With only one IMF board review remaining before the end of the $6.5 billion EFF programme, Pakistan is expected to present a budget aligned with the programme objectives, restore proper functioning of the foreign exchange market, and bridge the $6 billion gap before the board review.

June 22, 2023
Pakistan’s current account deficit decreases by 68% due to marginal increase in exports

According to statistics provided by the State Bank of Pakistan (SBP) on Monday, the current account deficit decreased 68.13 per cent year over year to $0.57 billion in October.

In comparison to September, when it stood at $0.36 billion, the deficit jumped by 56.2 per cent, reaching its highest level since April 2021.

According to the figures, the deficit for the first four months of the current fiscal year was $2.8 billion, down 46.82 per cent from $5.3 billion from July to October 2021.

According to the central bank, “continued import drop helped improve the current account imbalance.”

When compared to the same quarter in FY22, imports fell by $2.7 billion (11.6 per cent) and exports increased by $0.2 billion (2.6 per cent).

The current account deficit increased month over month despite a remark made last week by Finance Minister Ishaq Dar that it was anticipated to be below $0.4 billion.

Dar said that the deficit was being closely watched, managed, and handled for the good of the nation.

“The current account deficit was at $316m in September and expected to be below $400m in October,” he said, adding, “If this continues at the same pace, it will be around $5-6bn for the year, (while) the projected was $12bn.”

The deficit was not at a worrying level, the finance minister stressed.

Pakistan had a huge current account deficit of $17.3 billion, or an average of $1.44 billion per month, in the preceding fiscal year.

November 21, 2022
Pakistan’s current account deficit shrinks to $1.2 billion, reflecting decline in imports

According to figures provided by the State Bank of Pakistan (SBP) on Wednesday, Pakistan’s current account deficit (CAD) decreased to $1.2 billion in July from $2.2 billion in June, reflecting a 45.45 per cent month-over-month decrease.

The SBP ascribed the dip to a significant reduction in energy imports and ongoing moderation in other imports.

“The narrower deficit is the result of wide-ranging measures taken in recent months to moderate growth and contain imports, including tight monetary policy, fiscal consolidation & some temporary administrative measures,” it said in a tweet.

1/2 The current account deficit shrank to $1.2bn in Jul from $2.2bn in Jun, largely reflecting a sharp decline in energy imports & a continued moderation in other imports. Visit #EasyData https://t.co/kiWKKJLduD pic.twitter.com/Kt3Ev5BjMt

— SBP (@StateBank_Pak) August 23, 2022

But the current account deficit widened by 42 per cent year over year. In July 2021, a deficit of $851 million was reported as opposed to a deficit of $1.1 billion this year, according to the online financial statistics and analytics portal Mettis Global.

The trade deficit in services, which is still negative, decreased by 62 per cent month over month as a result of a 40 per cent decline in imports and a 17 per cent decline in exports. According to the figures, the trade balance in services was $260 million in July as opposed to $682 million in June.

The Mettis Global study showed a 9 per cent reduction in the trade deficit year over year.

It also pointed out that worker remittances, which it referred to as the foundation of the economy, fell by 9 per cent from one month to the next, coming in at $2.52 billion in July as opposed to $2.76 billion in June.

August 24, 2022
Pakistan’s exports grew 25% in the last nine months

Pakistan’s exports increased by 17.3 per cent in March 2021 to $2.773 billion, up from $2.365 billion in March 2021 and 25 per cent in the last nine months.

The Prime Minister’s Adviser on Commerce and Investment, Abdul Razak Dawood, said that exports increased by 25 per cent to $23.332 billion in the July-March fiscal year 2021-2022, compared to $18.688 billion in the same period last year, implying a $4.644 billion upsurge.

On the other hand, according to preliminary data from the Pakistan Bureau of Statistics (PBS), exports fell 2 per cent on a month-on-month (MoM) basis to $2.77 billion in March 2022, down from $2.82 billion in February 2022.

Dawood said in a tweet, “We are glad to share that Pakistan’s exports for Mar-2022 grew by 17.3 per cent to $2.773 billion as compared to $2.365 billion Mar-2021. For Jul-Mar 2022, our exports grew by 25 per cent to $23.332 billion as compared to $18.688 billion in Jul-Mar 2021. This is an increase $4.644 billion”.

While talking about the target for exports he added that “We expect to achieve our yearly target. The import figures would be shared when finalised by the PBS. We would like to congratulate our exporters for maintaining the momentum of exports under these testing times in the global market”.

Pakistan’s current account deficit (CAD) decreased by 78.46 per cent to $545 million in February from $2.531 billion in January, owing primarily to a steep drop in imports.

Read more: FBR records 29.1% growth during July 2021 to March 2022, despite providing ‘massive tax relief’

Surprisingly, the CAD crossed the $12 billion level in the first eight months of FY22, showing no signs of improvement in the external account. The CAD was only $34 million in February 2021.

April 4, 2022