Pakistan posts current account deficit of $245M in August

Pakistan posted a current account deficit of $245 million in August as compared to $82 million in the same month last year, according to data released by the central bank.

The deficit in the two months of the current fiscal year — July and August — amounted to $624 million as compared with $430 million of the same period last year.

According to the revised estimates, the current account deficit in July was $379 million. Earlier in June, the current account posted a surplus of $335 million.

In FY24, which ended on June 30, the current account recorded a surplus of $2.11 billion as compared to a deficit of $2.07 billion in the preceding year.

What is a current account?

A country's current account is the balance of its international transactions. It tracks the flow of income from exports, investment, remittances, foreign aid, and expenses paid for imports and debt financing. If the inflow of money into the country is higher than outflows, the current account is in surplus. If the outflow is greater, the balance is in a deficit. This current account balance is an important indicator to gauge a country’s economic health. If the current account deficit widens significantly, it threatens the country’s ability to pay for imports or service the debt owed to bilateral or multilateral partners.