Pakistan’s current account deficit drops by 86% in February amid import curbs, currency depreciation

This picture taken on January 11, 2023, shows a general view of the Karachi sea port. (AF/File)
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Updated 22 March 2023
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Pakistan’s current account deficit drops by 86% in February amid import curbs, currency depreciation

  • The country posted a deficit of $74 million as compared $519 million recorded last year in February
  • Remittance inflows, weakening currency are among factors that helped improve the deficit situation

KARACHI: Pakistan’s current account deficit (CAD) decreased by 86 percent to $74 million in February, hitting a two-year low due to a recent increase in remittances, import restrictions, and currency depreciation, according to official data and analysts.

The government imposed restrictions to process the import bill as it faced an extreme shortage of dollar liquidity and allowed only limited imports of goods to prevent a massive outflow of the greenback from the country.

According to the State Bank of Pakistan, the country recorded a current account deficit of $74 million last month, down 86 percent from a deficit of $519 million recorded in the same month last year.

The primary reason for the deficit’s decline was a 23.5 percent reduction in the country’s total imports on an annual basis, with total exports and remittances declining by 19 and nine percent during the same period, respectively.

During the eighth month of the current fiscal year, Pakistan’s deficit decreased by 68 percent to $3.9 billion, compared to a deficit of $12.1 billion recorded in the corresponding month last year.

“The $74 million CAD in February 2023 is the lowest monthly deficit since February 2021 due to a surge [by 4.9 percent] in the remittance inflows that supported the external position of the country,” Tahir Abbas, head of research at Arif Habib Limited, told Arab News on Tuesday.

“This is due to the continued impact of import curbs through strong administrative measures and currency depreciation,” he added. “Besides, the slowing economy is also a key reason behind the reduction in deficit.”

Pakistani banks are reportedly hesitant to open letters of credit (LCs) for goods imports, likely due to the government’s restrictive measures to prevent a significant outflow of dollars.

Pakistan’s import bill in February stood at $4.03 billion, according to the Pakistan Bureau of Statistics (PBS), down 17.25 percent from January’s $4.87 billion and 31.08 percent lower than February last year’s $5.85 billion.

Pakistan’s imports during July-February 2022-23 (FY23) totaled $40.12 billion, a 23.51 percent decrease from the corresponding period last year’s $52.45 billion.

PBS data show exports during the same period totaled $18.67 billion, a 9.21 percent decrease from last year’s $20.57 billion.

The import of oil posted a decline of 21 percent YoY in February, and the imports of mogas and high-speed diesel (HSD) decreased by 28 and 33 percent YoY, respectively, amid depressed demand.

Pakistani analysts said the import decline reflected the slowing economy, which was otherwise expected to grow by about one percent during the current fiscal year (FY23), and the depreciation of Pakistan’s national currency, which fell by more than five percent against the dollar in the last month alone.

“We expect that Pakistan’s GDP growth will remain between zero to one percent since demand remains depressed which is also reflected in the overall state of large industries that have posted negative growth,” Samiullah Tariq, research director at Pakistan-Kuwait Investment Company, told Arab News.

The import decline that improved the current account deficit is also attributed to the weakening of Pakistan’s national currency.

On Tuesday, the Pakistani rupee closed a little higher against the greenback at Rs283.92, compared to the previous closing of Rs284.03.

The stock that closed bearish on Tuesday also gained some support from the improving current account deficit number.

“Mid-session support was witnessed due to the upbeat data of $74 million current account deficit in February 2023 which fell by 68 percent on month-on-month basis,” Ahsan Mehanti, CEO of Arif Habib Corporation, said. “However, delays over IMF [International Monetary Fund] staff level agreement on bailout package, industrial closures over foreign exchange worries and political uncertainty played a catalyst role in the bearish close.”

Talks between cash-strapped Pakistan and IMF officials for the completion of the ninth review of a $7 billion bailout program have yet to be completed, despite a lapse of five months.

The completion of the review would pave the way for the disbursement of $1.2 billion from the fund, boosting the country’s foreign exchange reserves, which currently stand at $4.3 billion.


Pakistani journalists protest Israel’s bombing of Iranian state TV

Updated 7 sec ago
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Pakistani journalists protest Israel’s bombing of Iranian state TV

  • Israel bombed state-run Islamic Republic of Iran Broadcasting’s building on Monday as its conflict with Iran escalates
  • Charged Pakistani journalists in Karachi accuse Israel of targeting journalists deliberately to silence their voices

KARACHI: Dozens of Pakistani journalists protested in Karachi on Tuesday against Israel’s move to bomb Iran’s state-run television channel this week, accusing Tel Aviv of deliberately targeting journalists to silence their voices. 

Footage of anchor Sahar Emami went viral on Monday in which she can be seen denouncing Israel at the state-run Islamic Republic of Iran Broadcasting (IRIB) building before the live broadcast was interrupted by a huge blast. Shortly after, smoke and debris filled the screen.

The International Federation of Journalists (IFJ) confirmed that Israel’s strike on the IRIB building killed Nima Rajabpour, editor-in-chief of Khabar TV, and Masoumeh Azimi, a secretary at the state-run television channel. Israel and Iran have been targeting each other with missiles since Friday, when the Jewish state attacked Iran’s nuclear facilities and military leadership.

 Dozens of Pakistani journalists protested the move outside the Karachi Press Club. The protest was organized by the Pakistan Federal Union of Journalists (PFUJ) and the Karachi Union of Journalists (KUJ). Journalists carried placards inscribed with messages condemning Israel, shouting slogans expressing support for the people of Gaza and Iran. 

“It [Israel] has assassinated anyone across the world who tried to unmask its true face, anyone who tried to speak the truth,” PFUJ Secretary-General A.H. Khanzada told Arab News, accusing the Jewish state of killing journalists from Gaza to Iran.

The Committee to Protect Journalists (CPJ) has counted 178 journalists killed in Gaza by Israel since October 2023, making it the deadliest conflict for media workers ever recorded.

Khanzada urged the IFJ to redefine its global parameters of press freedom.

“If these are not corrected, many problems will arise — and these problems will affect the entire world,” he said, calling the response from global media organizations to the attack as “insufficient.”

Aamir Latif, a former Karachi Press Club secretary, agreed that Israel was systematically silencing journalists.

“Israel is not in a business to tell the truth,” Latif said. “In fact, it is in a business to block the truth. That is why it is targeting journalists whether it is Gaza or whether it is Iran,” he added.

Latif lamented Israel’s moves to target hospitals, media workers and other protected entities in the Middle East, saying they were directly violating international laws. 

Veteran journalist and former PFUJ secretary-general Mazhar Abbas called the Iranian TV bombardment a “direct assault on freedom of expression.”

“The figure [of journalists being killed in Palestine] is nearly around 150, which is even far bigger than the journalists killed in the Second World War,” Abbas told Arab News.

KUJ President Nasrullah Chaudhry said Pakistani journalists stood in solidarity with their Iranian counterparts.

“Since October, we have documented Israeli war crimes against media in Gaza,” Chaudhry said. “This is part of the same pattern.

“The media of Pakistan in general and Karachi in particular firmly stands against Israel aggression and assaults on journalists,” he told protesters. 

The protest ended with Pakistani journalists pledging to continue highlighting what participants called the “systematic targeting of truth tellers” by Israel across multiple conflict zones.


Islamabad says will not let militants exploit Iran-Israel conflict to attack Pakistan

Updated 17 June 2025
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Islamabad says will not let militants exploit Iran-Israel conflict to attack Pakistan

  • Planning Minister Ahsan Iqbal says Islamabad recently had “very good, close coordination” with Iran, Afghanistan against “terrorist” groups
  • Pakistan’s southwestern Balochistan province, sharing borders with Afghanistan and Iran, has seen a surge in militant attacks in recent months 

ISLAMABAD: Planning Minister Ahsan Iqbal said on Tuesday that Islamabad would not allow militants based in Iran and Afghanistan to take advantage of Tehran’s ongoing conflict with Israel to increase its “terrorist” attacks in neighboring Pakistan. 

Pakistan’s southwestern Balochistan province shares porous borders with Afghanistan to the north and Iran to the west. It has experienced a surge in militant attacks by Baloch separatists and other armed groups in recent years, who demand a greater share of Balochistan’s mineral resources for locals. 

Pakistan has remained at odds with both Afghanistan and Iran over instability at its shared, porous borders with the two countries. Islamabad blames Kabul for not taking action against Pakistani Taliban militants who it says regularly launch attacks in Pakistan’s Balochistan and Khyber Pakhtunkhwa (KP) provinces, allegations that Afghanistan denies. 

Ties between Islamabad and Tehran have also been strained in the past, with both nations blaming each other for not rooting out militancy in their countries. 

“Pakistan leadership has recently had very good, close coordination with both the leadership in Iran and with leadership in Afghanistan ensuring that their soil is not used by the terrorist groups to carry out terrorist attacks in the country,” Iqbal told foreign media reporters during a briefing in Islamabad. 

He added that Pakistani security forces were carrying out operations against militant groups in Balochistan and were confident they could “control” them.

“They are Indian-sponsored terrorist groups and they have already taken a hit with the defeat of India in the limited war we had and won’t get any space now [in the ongoing Iran-Israel conflict],” the minister said. 

Iqbal was referring to Pakistan’s days-long military confrontation with India last month in which both countries targeted each other with artillery fire, missiles, fighter jets and drone strikes before Washington brokered a ceasefire on May 10. 

Regional tensions have flared once again after Israel attacked Iran’s nuclear facilities and military leadership last Friday. The two countries have traded missiles since then, with world leaders calling for dialogue and restraint. 

The minister hoped Irani forces would not allow militants based in their country to carry out attacks against Pakistan. 

“We hope and are confident that the leadership in Iran will also exercise its full jurisdiction to make sure that no groups use the territory of Iran to carry out any terrorist action in Pakistan,” he said. 

He called on the international community, especially the G7 countries, to intervene and stop Iran’s conflict with Israel from escalating further. 

“This can have very serious consequences because this region supplies energy to the global economy and if there is any disruption in the supply of energy through escalation in this conflict, it will not just affect Iran, it will not just affect Israel, it will affect the entire world,” Iqbal warned. 

CPEC WORK TO CONTINUE

Iqbal said the Israel-Iran conflict will not affect the pace of development of the China-Pakistan Economic Corridor (CPEC), a multi-billion infrastructure network between Pakistan and China, as the military confrontation was not taking place in Pakistan. 

China has invested $65 billion in CPEC, its flagship project which is part of its Belt and Road Initiative, to build roads, railways, pipelines, and ports connecting China to the Arabian Sea. A key project is the deep-sea port at Gwadar in Balochistan, a province that faces a long-running separatist insurgency.

“So, our work in Pakistan will continue and CPEC will move forward as we are hoping and anticipating by the end of July, the 14th Joint Cooperation Committee (JCC) meeting will take place for CPEC,” Iqbal said, adding that by then the roadmap for the project’s phase 2 will be approved. 

Ethnic Baloch separatist groups, most prominent among them the Baloch Liberation Army, have targeted Chinese interests in Balochistan in recent years. This has led to China expressing concerns over the safety of its nationals in Pakistan. 

Iqbal said Beijing has expressed satisfaction over the improving security situation in Pakistan. 

“Chinese are very convinced that Pakistan is fully committed to improving the security situation in the country and in the coming months and years, we will have greater cooperation because Pakistan has worked very hard to counter these elements who have been involved in actions against Chinese,” the minister said.


Italian Navy ship arrives in Pakistan’s Karachi to strengthen maritime cooperation

Updated 17 June 2025
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Italian Navy ship arrives in Pakistan’s Karachi to strengthen maritime cooperation

  • Antonio Marceglia to discuss maritime security, hold joint training sessions during three-day visit
  • Pakistan, Italian navy ships to partake in warfare-related exercises designed to enhance coordination

ISLAMABAD: The Italian Navy ship Antonio Marceglia arrived in the southern port city of Karachi on Tuesday to strengthen maritime cooperation with Pakistan and partake in warfare-related exercises, Pakistan Navy’s military media wing said. 

The Italian ship arrived at the Karachi Port for a three-day goodwill visit during which the commanding officer and crew of the Antonio Marceglia were accorded a warm welcome by Pakistan Navy officials, the Italian ambassador to Pakistan and other officials of the Italian consulate in Karachi. 

The Director-General of Public Relations (DGPR) of the Pakistan Navy said in a statement that the Italian ship’s crew will participate in a range of professional engagements during its port call. These include cross-ship visits, discussions on maritime security and joint training sessions. 

“These engagements are designed to foster deeper mutual understanding, enhance bilateral naval cooperation and advance operational interoperability between the two navies,” the Pakistan Navy said. 

It said the visit would culminate in the Sea Phase, which would feature various warfare-related exercises designed to enhance tactical coordination and maritime security operations of both navies.

“The visit of Italian Navy Ship ITS ANTONIO MARCEGLIA reinforces growing maritime partnership between both countries,” the statement said. “It also reflects shared resolve of both navies to work together for regional stability.”

Pakistan regularly collaborates with its counterparts from various parts of the world to ensure illicit activities such as smuggling, drug trafficking and piracy are kept in check.


Pakistan stresses increasing trade, tourism cooperation with Bangladesh amid improving ties

Updated 17 June 2025
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Pakistan stresses increasing trade, tourism cooperation with Bangladesh amid improving ties

  • Deputy PM Ishaq Dar meets Bangladesh high commissioner to discuss ties, says Pakistan’s FO
  • Islamabad, Dhaka have sought closer ties since ex-Bangladesh PM Sheikh Hasina’s ouster in 2024

ISLAMABAD: Pakistan’s Deputy Prime Minister Ishaq Dar on Tuesday stressed the need to enhance cooperation in trade and tourism with Bangladesh, the Pakistani foreign office said, as Dhaka and Islamabad attempt to forge closer ties amid improving bilateral relations. 

Pakistan and Bangladesh have improved their strained ties since August last year after former premier Sheikh Hasina fled to India, forced by a violent student-led protest. Pakistan and Bangladesh were once one nation but split in a brutal 1971 war, with Bangladesh drawing closer to India. 

Bangladesh’s High Commissioner Iqbal Hussain Khan met Dar, who also serves as Pakistan’s foreign minister, in Islamabad to discuss bilateral ties, the Pakistani foreign office said. 

“Appreciating the positive trajectory of bilateral ties, he [Dar] emphasized the need to further expand cooperation- especially in trade, tourism, & people-to-people exchanges,” the foreign office said. 

In February this month, Bangladesh and Pakistan started direct government-to-government trade with Dhaka importing 50,000 tons of rice from Islamabad, a sign of improving relations between the two. 

Direct private trade between the countries restarted in November 2024, when a container ship sailed from Pakistan’s Karachi to Bangladesh’s Chittagong. It was the first cargo ship in decades to sail directly between the two nations. 

In recent months, Pakistan’s Prime Minister Shehbaz Sharif and Bangladesh’s Chief Adviser Muhammad Yunus have met on the sidelines of international forums, including the United Nations General Assembly in New York and the D-8 Summit in Cairo.

These interactions have been described as cordial, with both leaders expressing a desire to deepen bilateral cooperation.


Met office forecasts 25% above-normal monsoon rain for Pakistan this year

Updated 17 June 2025
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Met office forecasts 25% above-normal monsoon rain for Pakistan this year

  • Punjab’s disaster management agency says it has made arrangements to deal with the risk of flooding
  • Pakistan has witnessed extreme weather like heatwaves, droughts and devastating floods in recent years

ISLAMABAD: Pakistan is likely to experience 25 percent more rainfall than average during the upcoming monsoon season, officials said on Tuesday, with the country’s most populous province, Punjab, rolling out preparedness measures to address urban flooding and other climate-related emergencies.

The warning comes as Pakistan continues to suffer the effects of increasingly frequent and intense weather events, including heatwaves, droughts and devastating floods. Although the country contributes less than one percent to global carbon emissions, it remains among the most climate-vulnerable nations in the world.

Punjab’s Provincial Disaster Management Authority (PDMA) Director General Irfan Ali Kathia visited the Pakistan Meteorological Department (PMD) headquarters in Lahore to assess forecasts and coordination efforts ahead of the seasonal rains.

“This year’s monsoon rainfall is expected to be 25 percent above normal levels,” officials said during a briefing. “The heaviest rains are forecast for the month of August.”

During the visit, Chief Meteorologist Zahir Babar provided a detailed overview of the seasonal outlook and flood forecasting mechanisms, while emphasizing the importance of early warnings in major cities like Lahore, Multan, Faisalabad and Gujranwala to minimize urban flood impacts.

Kathia said all necessary arrangements have been completed to manage the risk of flooding during the monsoon.

He stressed that a joint response plan must be implemented by all concerned departments to deal with cloudburst events and urban flooding.

Pakistan experienced catastrophic monsoon rains in 2022 that submerged large parts of the country, killing nearly 1,700 people and causing damage to homes, farmland and infrastructure exceeding $35 billion, according to government and UN estimates.

Officials also reviewed the flood early warning system for hill torrents and the control room operations for real-time monitoring of river flows under the Flood Forecasting Division.

Kathia praised the Meteorological Department’s coordination and technical preparedness, calling the working relationship between the PMD and PDMA Punjab “excellent.”