In November, Pakistan’s current account reported a surplus of $447 million for the fifth consecutive month, compared to a deficit of $326 million over the same period last year, data released by the State Bank of Pakistan (SBP) showed on Tuesday.
“In contrast to the previous five years, due to an improved trade balance and a sustained increase in remittances, the current account has been in surplus throughout FY21,” the central bank said on Twitter.
“In November 2020, both exports and imports picked up, reflecting a recovery in external demand and domestic economic activity,” said the SBP.
On a combined basis, the July-November period’s gross current account surplus rose to a record $1.64 billion versus a deficit of $1.745 billion over the same period last year.
Remittances jumped 27 percent to $11.77bn during the five months under review after Covid-led travel sanctions boosted flows through legal channels.
“This turnaround in the current account, together with an improvement in financial inflows, raised SBP’s foreign exchange reserves by around $1bn in November 2020. At $13.1bn, they are now at their highest level in 3 years,” the state bank said.
Commenting on the growth, Prime Minister Imran Khan said that “despite Covid-19, Pakistan’s economy has witnessed a remarkable turnaround”
“In the meantime, Wajid Rizvi of Fortune Securities said: “During the pandemic, Pakistan’s external side managed to strongly batten down the hatches by reporting a current account surplus in FY21 for a fifth straight month.
“The most noteworthy characteristic is that the surplus increased despite a rise of $338m (up 22pc month-on-month) in the trade gap. Trade gap is expected to expand further primarily from an increase in food, textile, machinery and auto imports,” he added.
However, a sufficient foreign exchange reserves buffer has been provided by the current fiscal year-to-date results to cushion any subsequent increase in the trade deficit, he said.