Pakistan’s current account posted a surplus for the fifth consecutive month in November despite the unending fear of the second wave of Covid. The current account surplus reached $47 million compared to a deficit of $326 million a year ago for the same period.
According to data released by the State Bank of Pakistan on Tuesday, “In Nov20, the current account surplus rose further to $447 mn against a deficit of $326 mn in Nov19. So far in FY21, the surplus has reached $1.6 bn compared to a deficit of $1.7 bn over the same period last year.”
It went on to state, “In contrast to previous 5years, current account has been in surplus throughout FY21 due to an improved trade balance and a sustained increase in remittances. In Nov20, both exports and imports picked up, reflecting recovery in external demand and domestic economic activity.”
“This turnaround in the current account, together with improvement in financial inflows, raised SBP’s FX reserves by around $1 bn in Nov20. At $13.1 bn, they are now at their highest level in 3 years.”
Moreover, in a tweet on Tuesday, the Prime Minister wrote: “MashaAllah, despite COVID-19, great news on economy – remarkable turnaround, Current account surplus again in Nov: $447 mn.”
For the same period last year, the country faced a deficit of $1.7 billion. “State Bank of Pakistan’s foreign exchange reserves have risen to about $13 billion – highest in three years,” he added.
Samiullah Tariq, a head of research at Pak-Kuwait Investment Company, said, “The current account surplus is the highest in past five months, the positive factor is that despite a higher trade deficit (18pc YoY), a current account surplus came due to higher remittances and lower services account deficit.”
Another positive surprise was 51 percent increase in IT exports for November 20, and 38 percent YoY increase in July-November FY2021, he added.
“In my view, another positive aspect of this month’s current account surplus is that it has brought certainty and sustainability to the balance of payments that Pakistan can sustain a higher level of economic activity, meaning higher imports. The country can sustain a higher level of imports, as strong remittances and a pickup in exports are supporting the economy.”