Pakistan’s current account deficit clocked in at $1.425 billion in May 2022, compared to $640 million recorded in the same period of the previous year, showed data released by the State Bank of Pakistan (SBP) on Tuesday.

Updated figures of the SBP also revealed that the current account deficit stood at $618 million in April 2022. Hence, the current account deficit for May 2022 is 131% higher on a monthly basis.

The central bank said that while overall imports in May fell compared to April, a decline in remittances and exports on account of Eid holidays contributed to this rise.

“Moreover, excluding in kind imports that are fully financed and thus, do not undermine sustainability of the CAD, the deficit was more modest at $1 billion,” the central bank added.

Meanwhile, cumulatively, during the eleven-month period of the ongoing fiscal year (July-May of FY22), the current account deficit stood at $15.2 billion compared to a deficit of only $1.183 billion during the same period of the previous fiscal year (FY21), showed SBP data.

The current account balance is a key figure for Pakistan’s economy. A widening deficit in the current account leads to an outflow of dollars, which puts pressure on the currency that has continued to struggle against the greenback.

In an early morning development, Pakistan received combined economic and financial targets for the seventh and eighth reviews of its IMF bailout programme, said Finance Minister Miftah Ismail.

On Twitter, Miftah said the government had received the lender’s Memorandum of Economic and Financial Policies (MEFP) for both reviews, following meetings last week between the two sides.

The government wants to conclude an agreement with the monetary watchdog for the revival of the $6-billion program before approval of the Federal Budget 2022-23. It needs to get the budget approved by June 28.

The IMF programme is widely seen as crucial for Pakistan’s economy, which has struggled with high inflation and a widening current account deficit. The deterioration has caused the rupee to hit all-time lows several times during the year, with nearly 15% depreciation this calendar year alone.

This story was originally published in Business Recorder on June 28, 2022.