KARACHI: The country’s current account remained in surplus during the first 10 months of this fiscal year supported by higher home remittances inflows and growth in exports.
The State Bank of Pakistan (SBP) Tuesday reported that current account balance was in surplus of $773 million during July-April FY21, a significant turnaround from the $4.65 billion deficit during the same period of the last fiscal year (FY20).
According to the SBP, the ongoing economic revival is on a sound and sustainable footing and GDP growth for this fiscal year is expected to rise to 4 percent. Economic rebound was fueled by a well-calibrated policy response, it added.
As the economy rebounding strongly in FY21, Pakistan’s rising import bill was offset by unprecedented growth in workers’ remittances and recovery in exports. With the contained current account balance, the country’s foreign exchange reserves also surged to 40-year high level. With over two billion dollar monthly inflows, overall home remittances, sent by overseas Pakistani, reached highest ever level of $24.24 billion in the first ten months of this fiscal year. These inflows significantly contributed in surplus current account balance.
Economists said that with current picture of external account, the full year current account balance hopefully would be remained surplus.
Month on Month basis analysis revealed that current account balance posted a small deficit of $200 million in April 2021 compared to $510 million in April 2020, depicting a decline of 61 percent or $310 million. However, April 2021 deficit is some 506 percent higher than March 2021, in which current account posted $33 million deficit.
Exports and imports of goods have shown significant increased during the first ten months of the current fiscal year. However, the imports growth was higher than exports, which stood at $21 billion in July-April FY21 compared to $19.7 billion in the same period of last fiscal. While, during the period under review, imports registered an increase of 13 percent $42.3 billion. The balance on trade in goods rose by 21 percent to $21.376 billion.
The SBP reported that collective deficit of goods trade, services and income stood at $26.761 billion in first ten months of FY21 as against $25.24 billion in the corresponding period of FY20.
Copyright Business Recorder, 2021
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