Karachi: Pakistan is on the path of economic recovery, rapid growth in remittances, decline in imports and moderate growth in exports have turned the current account into a surplus.
According to State Bank data, the current account surplus value in November remained at the highest level since February 2015 (nine years and eight months), the current account balance in November was $729 million in surplus, the current account surplus in November is at a historic high after the current account surplus in February 2015.
In February 2015, the current account was in surplus of $800 million. In the first five months of the current fiscal year, the current account was in surplus of $944 million. In the same period of the fiscal year 2023-24, the current account was facing a deficit of $1.67 billion. Remittances from overseas Pakistanis played an important role in reducing the current account deficit.
Remittances in the first five months of the last fiscal year were $11 billion, while in the current fiscal year they were $14.76 billion, which played an important role in limiting the impact of the deficit in trade in goods and services.
Shankar Talreja, Director of Research, Topline Securities, while talking to The Express Tribune, said that the surplus in November was $729 million, which is the highest rate in 15 years, while this is an increase of 111 percent on a monthly basis, which has brought the surplus in the first five months of the current fiscal year to $944 million.
While a deficit of $1.67 billion was recorded during the same period of the previous fiscal year, it is noteworthy that in November, the trade deficit decreased by 14 percent on a monthly basis, the services deficit by 43 percent, and the primary deficit by 7 percent, which shows economic stability.
He said that there are several drivers for the increase in the surplus, such as a rapid increase in remittances, a decrease in imports, and a moderate increase in exports.
Sana Tawfiq, Research Head of Arif Habib Limited, said that the surplus of $729 million is the first large surplus after February 2015 and the second largest surplus after July 2013. Remittances play a major role in the increase in the surplus, which increased by 29 percent on an annual basis to $2.9 billion in November.
While exports have played a moderate role, with exports of goods increasing by 7 percent on an annual basis and exports of services by 8 percent, on the other hand, imports of goods have decreased by 24 percent on an annual basis, in which imports of machinery have decreased by 2 percent on a monthly basis, imports of food items by 4 percent, and imports of petroleum products by 29 percent, of which the main reason for the decrease in imports of food items and petroleum products is the decrease in the global prices of these items.
