Remittances keep current account in check

According to Business Recorder, Pakistan's current account deficit reached USD328 million in July, which was close to forecasts and small compared with the economy's scale. If imports do not rise sharply, the full-year balance could stay close to the official goal. The external account therefore began the new fiscal year on steady ground.

The goods trade deficit reached USD3.1 billion in July, and a services deficit of USD228 million lifted the total shortfall in goods and services to almost USD3.3 billion. Remittances covered that gap comfortably, with workers sending home USD3.63 billion during the month. The paper noted that the services balance has slipped, though not to a degree that signals immediate trouble.

The larger concern raised is a gap between SBP and PBS import figures that has persisted for a second consecutive month. SBP recorded July goods imports of USD6.15 billion, while PBS data showed USD6.89 billion, a difference of more than 13 percent. PBS figures also showed imports rising 18 percent year-on-year, while exports grew 9.5 percent to USD2.94 billion. Business Recorder warned that sustained imports near USD6.5 billion a month could strain the external account and increase reliance on remittances.