The current account maintained its historical rise showing a handsome surplus of $382 million in October, which is the fourth successive month in the current financial year 2020-21.
According to the State Bank of Pakistan (SBP), the current account surplus rose further to $382 million in October from $59 million in September, on the back of a sustained increase in remittances and a smaller trade deficit. Meanwhile, according to Arif Habib Ltd, this is the highest positive spell since July 2005.
Since July, the cumulative current account surplus has reached $1.2 billion, reversing the $1.4 billion deficit recorded in the same period last year.
A.A.H Soomro, Managing Director at Khadim Ali Shah Bukhari Securities, told ProPakistani,
“The declining imports and high remittances keep the account very very comfortable. Eventually, imports would kick-in. It’s time for SBP to keep the excess supply in the pockets. Imports would increase sequentially; TERF-led machines, Autos, RLNG, and Vaccine imports. So far, monetary policy to remain status quo.”
The trade deficit of goods and services dropped by 2.9 percent year-on-year during the period of July to October after a very long period. The deficit stood at $7.53 billion this year compared to $7.75 billion deficit recorded last year. The exports of goods and services stood at $7.35 billion and $1.62 billion in the last four months of FY21, whereas the imports of goods and services stood at $14.08 billion and $2.41 billion in the said period.
Remittances continued to surprise with double-digit growth of 26 percent year-on-year. It increased to $9.43 billion during July to October from $7.45 billion recorded in a similar period of the last year.
October proved to be good for the macroeconomic indicators including current account, remittances, strengthening of Rupee against Dollar, and inflows in foreign exchange reserves.
Federal Minister for Industries and Production, Hammad Azhar, through his Twitter account, said that Pakistan’s economy continues to improve. The trade deficit continues to shrink, and industrial production is showing strong growth.