Current account posts $98m deficit in August

The gap in Pakistan's current account shrank to $98 million in August, the lowest monthly shortfall since April, Mettis Global reported, citing State Bank of Pakistan balance of payments figures. The deficit was 78% below July's $445 million and 70% lower than the $324 million recorded in August last year. The report said the improvement came mainly because of trade timing and steady remittances rather than a structural fix, as the goods gap keeps widening year on year.

For July and August combined, the current account deficit totalled $543 million, 36.3% narrower than the $853 million gap in the same months last year. Remittance inflows over the two months climbed 14.7% to $7.29 billion, while over the same period the goods and services trade deficit widened 13.2% to $6.75 billion. Goods imports dropped 10.8% month on month to $5.49 billion in August, and exports fell 17.6% to $2.46 billion, leaving the goods trade gap at $3.03 billion.

Workers' remittances reached $3.66 billion in August, up 16.5% from a year earlier. Gross reserves held by the SBP totalled $18.48 billion by August-end, 18.1% above a year earlier but under June's peak of $19.69 billion. The overall balance of payments moved into a $118 million deficit from July's $1.39 billion surplus.