Islamabad, March 22, 2021: The external account posted a recovery in February 2021, as a Current Account Deficit (CAD) of merely US$50 million (-0.2 percent of GDP) was seen, compared to US$210 million (-0.9 percent of GDP) in January.
Cumulatively, for 8MFY21, there is still a net surplus in the current account of US$881 million (0.5 percent of GDP) vs. a CAD of US$2.7 billion (-1.5 percent of GDP) in 8MFY20.
On an MoM basis, the trade deficit remained almost unchanged as a slight uptick in exports was canceled out by import pressure (most likely due to rising food and machinery imports).
Similarly, remittances stagnated at US$2.27 billion in February alone (up 24 percent YoY in 8MFY21). The main reason for the contraction in CAD this month was the reduction in outflows in primary income (US$158 million MoM).
Simultaneously, there was some relief for the financial account, where there was no central bank repayment in February compared to US$536 million in the preceding month.
Overall, the financial account remains significantly weaker in the current year (8MFY21), with net inflows of merely US$129 million vs. US$7.6 billion in the same period last year.