Karachi: Recent data from the State Bank reveals a significant reduction in both the trade deficit and the current account deficit, primarily driven by a decline in imports.
Current Account Deficit Improvement
In the month of August 2023, the current account reported a deficit of $16 million. This marks a notable improvement compared to the $775 million deficit recorded in July 2023, reflecting a reduction of $759 million in the deficit for August.
Trade Deficit Decline
August 2023 saw a trade deficit of $1.868 billion, which is lower than the $2.008 billion trade deficit recorded in July 2023. Specifically, the trade deficit related to goods and services in August 2023 amounted to $2.570 billion, whereas the total trade deficit in July 2023 was $2.354 billion.
In the first two months of the current financial year, the current account deficit has limited to $935 million. This has a substantial improvement compared to the $2.035 billion deficit recorded in the first two months of the previous financial year. Similarly, the trade deficit for July and August 2023 combined was $3.948 billion, compared to the $6.522 billion deficit during the same period in 2022.
These trends indicate a positive trajectory in the country’s trade and current account balances, largely attributed to reduced imports.