By : Mohsin Siddiqui (Chief Reporter)

In adherence to the projected macroeconomic framework, Pakistan has informed the International Monetary Fund (IMF) about a planned reduction in the Current Account Deficit (CAD) by $2 billion, aiming to diminish it from $6.5 billion to $4.5 billion by June 2024.

This anticipated decline in the CAD signals a continuation of the slowdown in imports for the remaining period of the current fiscal year.

In the midst of challenges in achieving the desired level of external dollar inflows, Pakistani authorities are compelled to curtail the CAD to prevent a potential balance of payment crisis.

Pakistan’s external financing needs encompass a total of $28 billion, inclusive of foreign debt servicing amounting to $23.5 billion and the CAD projection of $4.5 billion.

Following the $3 billion Stand-by Arrangement (SBA) program agreement with the IMF, the pace of external loans and grants witnessed a slowdown in the past two months. However, the authorities are optimistic that the completion of the IMF program’s first review will boost dollar inflows from multilateral and bilateral creditors. IMF Agreement, Dollar Inflows, External Loans