As per the State Bank of Pakistan report, Current account deficit (CAD) of Pakistan reduced by 73% in the month of July.
The Current Account Deficit declined to $579 million in July, as compared to $2.1billion in July-2018. The Current Account Deficit has been reducing since last few months. CAD in June-2019 stood at $921 million. State Bank of Pakistan projects Current Account Deficit in the range of $7 billion to $8 billion for FY2020.
The trade data reveals that the main reason for the decline in CAD was a significant decline in Imports which reduced to $4.08 billion in July-2019 as compared to $5.49 billion in July-2018. The exports also showed a positive trend and increased by 10% to $2.233 billion in July-2019. Resultantly, the Trade deficit for goods fell to $1.847 billion, as against a deficit $3.485bn in July-2018. The balance of trade in services, decreased by 8.5% to $473 million.
Analysts are of the view that the decline in External Deficit will bring stability to Rupee exchange rate and will provide much-needed support for domestic sufficient manufacturers