Pakistan’s current account deficit witnessed a sharp decline in July 2024, though it did not achieve a surplus.
According to the current account statistics released by the State Bank of Pakistan (SBP), the country faced a current account deficit of $162 million in the first month of the current financial year.
This figure represents a significant 78% decrease compared to the same period last year, when Pakistan recorded a current account deficit of $740 million in July 2023. The July 2024 deficit was also 48% lower than that of June 2024, when the deficit stood at $313 million.
While experts initially expected a smaller deficit, they said the current account deficit for July 2024 was higher than expected. This deficit has been attributed to a widening trade gap, which increased by 11% from June to July 2024, according to analysts.
Also Read: Foreign Direct Investment continues to decline on month-on-month basis
Despite this increase, the overall reduction in the current account deficit is seen as a positive sign of improvement for Pakistan's economy. However, experts caution that achieving a surplus will require further efforts to curb the trade deficit and improve export performance in the months ahead.
Meanwhile, the decline in Foreign Direct Investment (FDI) in the country could not be stopped. The State Bank released the statistics of gross and foreign direct investment in the country. Foreign direct investment fell from $360 million to $170 million over four months.
An FDI of $13.6 million was recorded in Pakistan in July, while in June it stood at $169 million. In July 2024, an investment of $24 million was made in the stock market. Foreign private investment increased from $99.5 million annually to $160 million in July 2024.
