Pakistan's balance of payments swings to $4.39bn deficit in September
Pakistan's overall balance of payments swung to a deficit of $4.39 billion in September from $118 million in August, according to State Bank of Pakistan data, as the current account deficit widened to $356 million from $73 million. For July-September the balance of payments recorded a deficit of $3.12 billion, against a surplus of $274 million in the same period a year earlier.
The deterioration was driven by the goods trade gap, which widened 21.1% to $9.33 billion in the first quarter of the fiscal year as imports grew nearly twice as fast as exports. Goods imports rose 14.3% to $17.78 billion from $15.56 billion, while exports increased 7.7% to $8.45 billion. The current account deficit for the quarter reached $874 million, compared with $755 million a year earlier. In September alone, exports rose 15.5% year on year to $3.02 billion, reversing a 1.5% decline in August, but imports grew 22.7% to $6.17 billion, widening the monthly goods deficit to $3.16 billion from $2.42 billion.
Services exports rose 22.8% to $2.72 billion in the quarter, led by telecommunications, computer and information services at $1.25 billion, up from $1.06 billion. Services imports also increased, to $3.55 billion from $3.05 billion, leaving the services deficit slightly narrower at $831 million. Workers' remittances rose 14% to $10.88 billion for the quarter, though monthly inflows slipped to $3.59 billion in September from $3.66 billion in August. The primary income deficit widened to $2.32 billion from $2.27 billion.
Foreign direct investment rose 20% to $720 million in the quarter, although monthly inflows slowed to $219 million in September from $322 million in August. Portfolio investment recorded a net inflow of about $2.93 billion, against a net outflow of $631 million a year earlier, including $2.87 billion in September largely in debt securities. Despite those flows, the financial account recorded a net outflow of $4.16 billion, compared with $726 million a year earlier. Gross foreign exchange reserves stood at $22.88 billion in September, against $18.49 billion in August.
In supporting market news, the rupee edged up Rs0.01 against the dollar on Friday to close at 276.91 in the inter-bank market. Gold rose Rs2,800 per tola to Rs440,636, according to the All-Pakistan Gems and Jewellers Sarafa Association, with 10-gramme gold up Rs2,401 at Rs377,774 and silver climbing Rs108 to a record Rs6,256 per tola.
