The economy of Pakistan has released figures showing there was a current account deficit of $3.4 billion in Q3. This is up by just under $1 billion from their Q2 figure.
Although such a large deficit clearly indicates the imbalance in the trade of goods and services with other economies around the world, it does show a welcome return to ‘normal’ economic activity.
The Pakistani economy traditionally runs a large trade deficit but had a surplus during the second half of 2020 – the first time in over 5 years.
Current Account of Pakistan
source: tradingeconomics.com
The significant shift to a dramatic current account deficit has been largely attributed to a resurgence in economic activity and high commodity prices worldwide.
THINK LIKE AN ECONOMIST!
Q1. Define the term current account?
Q2. What is meant by the term current account deficit?
Q3. Explain one impact a large current account deficit will have on a domestic economy.
Q4. Using the graph above, describe the trend of Pakistan’s current account in the last 3 years.
Q5. Using this website, list the major imports and exports of Pakistan.
Q6. Choose another country in the world and find out what was their most recent current account balance, and what are their major imports and exports.
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