February CA balance posts $877 million surplus

The country's current account balance posted a $877 million surplus in February 2015 supported by higher services exports and rising foreign inflows. Economists said the surplus CA balance would help build the country's foreign exchange reserves, which presently stood over $16 billion. They said higher exports of services have largely contributed to the lower CA deficit during this fiscal year.
According to State Bank of Pakistan (SBP), Pakistan's current account deficit continued to narrow with the inflows of foreign exchange and drop in import bill as it stood at $1.614 billion in July to Feb of FY15 compared to a deficit of $2.453 billion in the same period last fiscal year (FY14), depicting a decrease of 34 percent or $839 million. Month-on-month basis, the country's current account balance was $877 million surplus in February 2015 compared to $74 million deficit in January 2015.
Analysts said the forex reserves situation is likely to further improve with the IMF tranche under the Extended Fund Facility and sell-off of shares of government holdings in banks but the economic managers should take concrete measures to control imbalance between imports and exports.
They were of the view that the deficit should be contained in the period of low oil prices in the international market whereas exports values could be increased in the months to come with depreciation of rupee against dollar.
The SBP revealed that overall deficit of trade, services and income sector stood at $15.682 billion in first eight months of this fiscal year compared to $15.525 billion in the same period of last fiscal year.
The country's goods trade deficit was seen quite controlled subsequently the global oil prices impacted positively, reaching $11.67 billion in July to Feb of FY15 compared with $11.21 billion in the corresponding period of FY14. Similarly, with $4.2 billion exports and $5.351 billion imports, the service trade deficit stood at $1.12 billion in the eight months of current financial year down from $1.818 billion.
In contrast, the remittances continued to show a double-digit growth of 14.6 percent on year-on-year basis. It reached $11.75 billion in eight months of FY15 compared with $10.24 billion in the corresponding period of last financial year.