In October, the fourth successive month in the current 2020-21 financial year, the current account retained its historical increase, showing a handsome surplus of $382 million.
According to the State Bank of Pakistan (SBP), on the back of a sustained rise in remittances and a smaller trade deficit, the current account surplus increased further to $382 million in October from $59 million in September. Meanwhile, this is the greatest optimistic spell since July 2005, according to Arif Habib Ltd.
The growing current account surplus has reached $1.2 billion since July, reversing the deficit of $1.4 billion reported over the same period last year.
During the period from July to October, the trade deficit for goods and services decreased by 2.9 percent year-on-year after a very long period. This year’s deficit was $7.53 billion compared to the $7.75 billion deficit reported last year. In the last four months of FY21, goods and services exports stood at $7.35 billion and $1.62 billion, while imports of goods and services stood at $14.08 billion and $2.41 billion in the same period.
With double-digit growth of 26 percent year-on-year, remittances were still shocking. It rose from $7.45 billion reported in a comparable time last year to $9.43 billion during July to October.
October proved to be positive for macroeconomic indicators, including current accounts, remittances, dollar-based rupee strengthening, and foreign reserve inflows.
Hammad Azhar, Federal Minister for Industries and Development, through his Twitter account said that Pakistan’s economy is continuing to develop. The trade deficit continues to decline, and good growth is seen in industrial manufacturing.