Current account balance posts $157 million surplus in February

The country''s current account balance posted a $157 million surplus in February 2016 supported by lower import bill and higher foreign inflows. Economists said that a surplus current account was a good indication for the economy and would reduce the pressure on external account. "The lower current account deficit, definitely, would also help build foreign exchange reserves, presently stood at $20.7 billion mark," they added.
According to State Bank of Pakistan (SBP), the country''s current account balance turned positive in the last months and was surplus by $157 million in February 2016 compared to a $590 million deficit in January 2016. SBP reported that cumulative current account in the first eight months (July-Feb) of this fiscal year (FY16) is still negative, however, slightly lower than previous year.
The country''s current account posted a $1.859 billion deficit in July-February of FY16 compared to $1.947 billion in corresponding period of last fiscal year (FY15), depicting a decrease of 4.5 percent or $88 million. Cumulative deficit of goods trade, services and income stood at $16.398 billion in first eight months of this current fiscal year as against $16.343 billion in the same period of last fiscal year.
The country''s overall goods trade registered $11.909 billion deficit with $14.397 billion exports and some $26.303 billion imports during July-February of FY16. Analysts said that lower commodity prices particularly oil price have reduced the import bill. However, exports are also on decline, due to which the positive impact of the lower import bill is not being reflected on goods deficit. "Concrete efforts are required to enhance the country''s overall exports," they urged.
Similarly, during the period under review, income sector outflows stood at $3.375 billion and inflows at $349 million, depicting a deficit of $3 billion. It may be mentioned here that Pakistan''s current account deficit fell 13 percent to $2.7 billion in the last fiscal year (FY15) led by double digit growth in home remittances and lower oil prices in the international market.