ISLAMABAD - Almost all major economic indicators have deteriorated in the first month (July) of the current fiscal year over the corresponding period of the previous year.
Apart from exports, all other economic indicators including imports, current account deficit, foreign investment, foreign exchange reserves and inflation rate have deteriorated in July 2022 as compare to same period of the previous year, according to the latest data of the Ministry of Finance. Inflation based on Consumer Price Indicator (CPI) for the month of July FY 2023 is recorded at 24.9 percent as compared to 8.4 percent during the same month last year. This was the second consecutive month in which annual inflation escalated above 20 percent.
Meanwhile, the current account posted a deficit of $1.2 billion for July FY 2023 as against a deficit of $851 million last year, mainly due to decline in workers’ remittances owing to seasonality. However, the current account deficit shrank to $1.2 billion in July 2022 as against $2.2 billion in June 2022, largely reflecting a sharp decline in energy imports and continued moderation in other imports. Exports grew by 2.7 percent during July FY 2023 and reached $2.3 billion as compared to $2.2 billion last year. Imports also grew by 0.3 percent during July FY 2023 and reached $5.38 billion as against $5.37 billion last year. Resultantly, the trade deficit (July FY 2023) reached $3.09 billion as against $3.1 billion last year.
Foreign Direct Investment (FDI) has also declined by 43.3 percent and reached $58.9 million during July FY 2023 from $103.8 million last year. On monthly basis, FDI was recorded at $58.9 million in July 2022 as against an inflow of $271.1 million in June 2022. Foreign Private Portfolio Investment has registered a net inflow of $3.7 million during July FY 2023. Foreign Public Portfolio Investment recorded a net outflow of $17.7 million. The total foreign portfolio investment recorded an outflow of $13.9 million during July FY 2023 as against an inflow of 1,000.7 million last. Total foreign investment during July FY 2023 reached $44.9 million as compared to $1,104.5 million last year.
Worker’s remittances In July FY 2023 recorded at $2.5 billion from $2.7 billion over the corresponding period of the previous year, decreased by 7.8 percent and have continued to remain above the $2 billion mark since June 2020. On MoM basis, remittances decreased by 8.6 percent in July 2022 as compared to June 2022 ($ 2.7 billion). This decrease largely reflected the lower number of working days in July because of Eid, at 17 working days compared to 22 last month and 18 in July 2021. Share of remittances (July FY2023) from Saudi Arabia remained 23.0 percent ($580.6 million), UAE 18.1 percent ($456.2 million), UK 16.3 percent ($411.7 million), USA 10.1 percent ($254.3 million), other GCC countries 11.1 percent ($280.6 million), EU 11.7 percent ($294.4 million), Malaysia 0.5 percent ($11.4 million), and Other countries 9.2 percent.
Foreign Exchange Reserves Pakistan’s total liquid foreign exchange reserves stood at $13.5 billion on August 19, 2022, with the SBP’s reserves recorded at $7.8 billion, while commercial banks’ reserves remained at $5.7 billion. However, the reserves were $27.343 billion in the same period of the previous year. The SBP held reserves were $20.3 and other banks $7 billion.
Apart from exports, all other economic indicators including imports, current account deficit, foreign investment, foreign exchange reserves and inflation rate have deteriorated in July 2022 as compare to same period of the previous year, according to the latest data of the Ministry of Finance. Inflation based on Consumer Price Indicator (CPI) for the month of July FY 2023 is recorded at 24.9 percent as compared to 8.4 percent during the same month last year. This was the second consecutive month in which annual inflation escalated above 20 percent.
Meanwhile, the current account posted a deficit of $1.2 billion for July FY 2023 as against a deficit of $851 million last year, mainly due to decline in workers’ remittances owing to seasonality. However, the current account deficit shrank to $1.2 billion in July 2022 as against $2.2 billion in June 2022, largely reflecting a sharp decline in energy imports and continued moderation in other imports. Exports grew by 2.7 percent during July FY 2023 and reached $2.3 billion as compared to $2.2 billion last year. Imports also grew by 0.3 percent during July FY 2023 and reached $5.38 billion as against $5.37 billion last year. Resultantly, the trade deficit (July FY 2023) reached $3.09 billion as against $3.1 billion last year.
Foreign Direct Investment (FDI) has also declined by 43.3 percent and reached $58.9 million during July FY 2023 from $103.8 million last year. On monthly basis, FDI was recorded at $58.9 million in July 2022 as against an inflow of $271.1 million in June 2022. Foreign Private Portfolio Investment has registered a net inflow of $3.7 million during July FY 2023. Foreign Public Portfolio Investment recorded a net outflow of $17.7 million. The total foreign portfolio investment recorded an outflow of $13.9 million during July FY 2023 as against an inflow of 1,000.7 million last. Total foreign investment during July FY 2023 reached $44.9 million as compared to $1,104.5 million last year.
Worker’s remittances In July FY 2023 recorded at $2.5 billion from $2.7 billion over the corresponding period of the previous year, decreased by 7.8 percent and have continued to remain above the $2 billion mark since June 2020. On MoM basis, remittances decreased by 8.6 percent in July 2022 as compared to June 2022 ($ 2.7 billion). This decrease largely reflected the lower number of working days in July because of Eid, at 17 working days compared to 22 last month and 18 in July 2021. Share of remittances (July FY2023) from Saudi Arabia remained 23.0 percent ($580.6 million), UAE 18.1 percent ($456.2 million), UK 16.3 percent ($411.7 million), USA 10.1 percent ($254.3 million), other GCC countries 11.1 percent ($280.6 million), EU 11.7 percent ($294.4 million), Malaysia 0.5 percent ($11.4 million), and Other countries 9.2 percent.
Foreign Exchange Reserves Pakistan’s total liquid foreign exchange reserves stood at $13.5 billion on August 19, 2022, with the SBP’s reserves recorded at $7.8 billion, while commercial banks’ reserves remained at $5.7 billion. However, the reserves were $27.343 billion in the same period of the previous year. The SBP held reserves were $20.3 and other banks $7 billion.
