Karachi July 19 2021: Pakistan’s external position is at its strongest in many years. In line with SBP projections, CAD in Fiscal Year 2021 fell to only 0.6 percent of GDP. This is lowest in 10 years, with exports and remittances at all-time highs. FX reserves rose by USD 5.2billion in Fiscal Year 2021 to over USD 17 billion, a 4½ year high.
In June, the current account deficit rose to USD 1.6 billion. Compared to May, exports of goods and remittances increased by USD 368 million and USD 197 million, respectively. Meanwhile, imports of goods rose by USD 1.4 billion.
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Some of the rise in imp was seasonal, associated with bunching of year-end payments. Imp bill was also larger than May due to higher oil imports and Covid vaccines. Encouragingly, imports of capital goods like machinery continued to rise, reflecting improvement in investment outlook.