The State Bank of Pakistan (SBP) shared in a tweet that the current account deficit (CAD) increased to $1.4 billion in May. While overall imports declined in April, a drop in remittances and exports due to Eid holidays contributed to this increase.
1/2 The current account deficit (CAD) rose to $1.4bn in May. While overall imports fell compared to April, a decline in remittances and exports on account of Eid holidays contributed to this rise. pic.twitter.com/pZcZpcZ1op
— SBP (@StateBank_Pak) June 28, 2022
Furthermore, disregarding in-kind imports that are fully paid and so do not affect the CAD’s sustainability, the deficit was $1 billion.
In the meantime, cumulatively, during the eleven-month period of the ongoing fiscal year (July-May of FY22), the current account deficit stood at $15.2 billion compared to a deficit of only $1.183 billion during the same period of the previous fiscal year (FY21), showed SBP data.
According to the Finance Division, the war between Russia and Ukraine is putting pressure on global economy particularly in Europe and Central Asia, surging inflation, debt and a spike in poverty level. The economic impact has reverberated through multiple channels, including commodity and financial markets, trade and migration links which adversely impacting business confidence. Global commodity prices remained mixed in April 2022. The current account deficit shrank 38.6 per cent on a month-on-month basis to $623 million in April, data released by the State Bank of Pakistan (SBP). Energy prices fell by 6.1 percent while non-energy commodities rose by 0.6 percent as compared to March 2022. On YoY basis, their prices increased by 90 percent and 28.4 percent respectively
PTI spokesperson, Muzammil Aslam shared his stance on SBP’s latest data revelation on Twitter. “SBP admission of decline in exports & remittances in May (just second month) of their govt. What else proofs one need to know about their incompetency. Let me tell you June is even more horrible”, he said.
SBP admission of decline in exports & remittances in May (just second month) of their govt. What else proofs one need to know about their incompetency. Let me tell you June is even more horrible. https://t.co/tK8X7wXeBk
— Muzzammil Aslam (@MuzzammilAslam3) June 28, 2022
Moreover, a social activist criticized SBP for bringing in Eid which was only in the first week of May. He added, “what about the rest of May? Doesn’t remittance actually increase on account of Eid?”
Why does SBP had to bring in Eid which was only in the first week of May. What about the rest of May? Doesn't remittance actually increase on account of Eid? https://t.co/F3Rj3H7XBl
— اجل (@FalanaaDhimkana) June 28, 2022
Analysts expect that a favorable outcome of talks between the IMF and Pakistani authorities would ease pressure on foreign exchange reserves and the currency.