Pakistan’s Current Account Deficit (CAD) significantly decreased by 78 percent in July 2024, dropping to $162 million from $741 million in the same month last year, according to the latest figures released by the State Bank of Pakistan (SBP).

Despite the substantial reduction, the deficit was higher than anticipated due to a larger-than-expected trade deficit of $2.4 billion reported by the SBP for July, compared to $1.97 billion previously reported.

Typically, SBP’s deficit figures are lower than those reported by the Pakistan Bureau of Statistics (PBS), noted Topline Securities in a brief analysis.

July’s CAD was 48 percent higher than the $313 million deficit recorded in the previous month.

In terms of trade, exports saw a notable increase of 13 percent, reaching $2.39 billion in July 2024, up from $2.1 billion in the same period last year. Imports also rose, spiking by 16 percent to $4.8 billion from $4.1 billion in July 2023.

Additionally, remittances from overseas Pakistanis surged by over 48 percent, totaling $2.99 billion in July 2024, compared to $2 billion in the same month last year.

This increase in remittances has provided a significant boost to the country’s foreign exchange reserves, helping to offset the trade deficit and contributing to the narrowing of the current account deficit.