By Sajjad Ali
ISLAMABAD: The current account maintained a surplus in the third straight month with a huge surplus of $792 million during the first quarter of the current financial year 2020-21 mainly on the healthy inflows of remittances and control over import bill.
According to the State Bank of Pakistan, this is the first quarterly surplus in more than five years.
This is indeed a record that the current account retained its surplus-value for a quarter of the financial year. According to data updated by the State Bank of Pakistan, the country reported a surplus of $73 million in September, and $211 million (revised figure) in August, and $508 million (revised figures) in the month of July. The surplus-value of September fell significantly.
A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities told ProPakistani, the surplus is backed by supernormal growth in remittances, which would moderate. The import bill ought to increase due to monetary easing led demand & energy imports. Exports growth is not so impressive. That needs to go touch double digits.
Last year, the country recorded a deficit of $1.49 billion in the same period of the first quarter of FY20. The handsome surplus of the current account shows stability in external accounts backed by the various measures of the economic managers of the present government. The improvement in the trade bill and the handsome inflows of the remittances contributed to the surplus-value of the current account during the first two months of the current financial year.
The import of goods reduced to $10.6 billion from $11.03 billion and the import of services also decreased to $1.76 billion from $2.39 billion by the end of the first quarter of FY21. The reduction of imports bill also supported the balance of payment of the country to contain the deficit position.
Meanwhile, the export of goods stood at $5.35 billion versus $5.98 billion last year, and services stood at $1.22 billion compared to $1.29 billion. The exports declined on a year-o-year basis however they slightly picked up on a month-to-month basis as the economic activities are being restored globally and locally.
