For the fourth consecutive month in October, the country’s current account experienced a surplus, rising to $382 million, or 1.6 percent of the gross domestic product (GDP), data released by the State Bank of Pakistan (SBP) showed on Thursday.
Compared with $59m in September, the current account was up 547pc month-on-month.
“The surplus was due to a sustained growth in remittances and a lower trade deficit,” said the central bank.
The accumulated current account surplus has hit $1.2 billion since the beginning of this fiscal year in July, reversing the $1.4bn deficit reported in the same timeframe last year the SBP added.
“A fourth consecutive monthly surplus was reported in the current account in October […] an improvement was seen due to a better trade deficit as imports decreased by 9pc month-on-month compared to exports rising by one percent month-on-month,” said Syed Atif Zafar, chief economist at Topline Securities.
At $2.28bn, remittances have remained safe, he said.
The trade deficit in October reduced by 20pc to $1.49bn from $1.86bn in September on a monthly basis. Remittances clocked in at $2.284bn during the month, unchanged from the previous month.
A large rise in remittances over the current fiscal year has helped the country’s current account.
So far, overall remittance inflows have risen to $9.43bn, up 26.5pc, in the four-month period from July to October, compared to $7.45bn in the same period last year.
On the other hand, over the same period from July to October, the country’s trade deficit in goods rose by four percent to $6.74 billion from $6.48 billion over the same period last year the trade balance in services declined by 38 percent to $785 million compared to $1.27 billion.
In response to this growth, Hammad Azhar, Minister for Industries and Production, said that the economy of Pakistan continues to improve.”
“The trade deficit is starting to shrink and there is good growth in industrial development,” he added.
Pakistan's economy continues to improve. Pakistan has posted a Current Account Surplus for the fourth successive month of the fiscal year (total $1.2BN). The Trade Deficit continues to Shrink and Industrial Production is showing Strong Growth.
— Hammad Azhar (@Hammad_Azhar) November 19, 2020
Federal Minister of Planning and Development Asad Umar said This is the fourth month of the current account surplus. With monthly current account deficits of $2 billion when the government was created, we inherited the highest current account deficit in history!”
382 million $ current account surplus in Oct. This is the 4th month of current account surplus. Cumulative surplus jul to oct is $ 1.2 billion. We inherited the biggest current account deficit in history with monthly current account deficits of $2 billion when govt was formed!
— Asad Umar (@Asad_Umar) November 19, 2020