In a positive development, Pakistan’s current account deficit contracts by 73pc in July
As per the data from the month of July, exports have gone up by an optimistic $2.233bn.
Pakistan’s current account deficit (CDA) decreases by a gigantic 73pc this year in the month of July. According to the report published by State Bank of Pakistan on Tuesday previous year in the same period, the current account deficit was $2.13 billion. Pakistan has also accepted a loan of $6 billion from IMF this year to improve the country’s economy and standard of living.
Arif Habib Head of Research Sami Ullah Tariq told a local news source that the substantial amount of difference that has been seen in the current account is due to 26pc decrease in import and 11 pc increase in export. IMF conditions also played a very vital role in the decrease of import and increase in export.
A decrease in the current account deficit is a positive indicator. Although it is still sizeable and the figures stand at quite a startling point, but hope can still be seen as it dipped 37pc from $921m in June.
Financial experts are of the view that if Pakistan continues to successfully bring CAD down, the situation will be ‘manageable’ for the government which has faced a lot of criticism due to their failure on economic fronts.
The decrease in imports responsible for the positive impact:
As per the data from the month of July, exports have gone up by an optimistic $2.233bn. The figures look quite positive as compared to $2.012bn. On the other hands, the imports also plunged to $4.08bn, from $5.497bn compared to the same month last year.
The decline in exports has been one of the key reason for the lower CAD. But the cuts in imports has been heavily criticized as well as it impedes exports as well. It cannot be overlooked as exports depend on imports as well.
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