Federal Minister for Finance and Revenue Miftah Ismail said on Friday that the government’s talks with the International Monetary Fund (IMF) were moving in a positive direction, and would soon result in economic recovery.
The minister said in a tweet that the Current Account Deficit for April was $623 million, which was less than half the average for the first 9 months of the fiscal year, during the Pakistan Tehreek-e-Insaf (PTI) government, adding that this was “a very good sign for external stability.”
The Current Account Deficit for April came in at $623 million, less than half the average for the first 9 months of the fiscal year. This is a very good sign for external stability. With positive IMF talks underway, we expect a turnaround in the economic situation very soon.
— Miftah Ismail (@MiftahIsmail) May 20, 2022
Miftah’s statement came a day after the State Bank of Pakistan announced that the Current Account Deficit – the gap between foreign expenditures and income – had shrunk by 39%, and was only two-thirds of the deficit of March 2022.
The central bank attributed this shrinkage to an increase in workers remittances, which had hit a historic high in April, as well as a fall in imports.
Current Account Deficit shrunk to $623mn, in Apr 22; only two-thirds of Mar22 deficit of $1015mn. A rise in workers’ remittances (by $315mn) & a fall in imports (by $246mn) explain this reduction. Cumulatively, CAD reached $13,779mn during Jul-Apr FY22.https://t.co/Od8ikVdOd5 pic.twitter.com/smhwJlyTZu
— SBP (@StateBank_Pak) May 19, 2022
Additionally, the export earnings also improved in April, going from $83 million in March, to $3.15 billion this month.
The talks between the IMF and Pakistan began on Wednesday in Doha, Qatar, and are scheduled to go on till the 24th, when Finance Minister Miftah will also join the Pakistani delegation in Doha for the final round of negotiations.
The government is hoping to negotiate the reinstatement of the stalled $6 billion loan programme. It is expected that energy subsidies will be withdrawn, and new subsidies will be rolled out to the oil and power sectors.
