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Tuesday, July 16, 2024

Pakistan’s current account balance boasts surplus for fifth consecutive month

Pakistan's current account has for five consecutive months been in a surplus, attributed to increase in exports and a decrease in imports

Pakistan’s current account balance has stayed in surplus for the fifth successive month; in November, the current account surplus stood at $447 million.

Thus, the streak lands the country’s current account surplus at a three year high above $13 billion. This comes despite the coronavirus pandemic raging around the world and seriously affecting business activities throughout the globe.

 “Despite Covid-19, great news for the economy – remarkable turnaround. Current account surplus again in November: $447 million. For the fiscal year so far, the surplus is $1.6 billion instead of a deficit of $1.7 billion in the same period last year,” Prime Minister Imran Khan said on his official Twitter handle on Tuesday.

Read more: Pakistan shows current account surplus: PM Imran lauds economic recovery

“State Bank of Pakistan’s (SBP) foreign exchange reserves has risen to about $13 billion, highest in three years.” “Yes, it is a record. Pakistan has never before seen its current account balance in surplus for five successive months,” Pak-Kuwait Investment Company (PKIC) Head of Research Samiullah Tariq said, expressing his views to an Express Tribune.

Pakistan’s economy in a position to afford imports

“Pakistan seems to sustain the positive trend (current account balance in surplus), as we advance,” he said, adding also the national economy was now in a position to afford an increase in imports of $200-400 million a month.

Samiullah explained that Pakistan had turned the destructive pandemic into an opportunity, such as an increased inflow of workers’ remittances and continuous recovery in Pakistan’s exports.

Pakistan’s IT and software exports have also steadily increased even during pandemic times.

“Our IT (information technology) exports have spiked 51% to $168 million in the month. An additional inflow of $50 million during the crisis times is meaningful for us.”

Read more: Pakistan’s Age of Accountability: Will it sustain itself?

The government encouraged the IT sector’s exports by making it easier for IT freelancers to bring in their money and keep up to 35% of their income in foreign accounts in the form of workers’ remittances.

The move encouraged the sector to bring in the money that was being earned abroad. Earlier, they used to hold their earnings mostly in foreign accounts due to hardships faced in bringing the money home.

“Government’s incentives have encouraged freelancers to bring their foreign earnings into the country,” he said.

Besides, overseas Pakistanis have been opening digital accounts in local banks in good numbers and depositing their savings into the accounts for the past three months. This is also adding to the country’s foreign currency reserves.

The government’s successful initiatives, such as Roshan Digital Account, allowed these people to bring in their money much more efficiently.

On his YouTube channel, Muhammad Bilal Lakhani explained that this success has come by design, not by accident. He explains that this is due to many policies that the government undertook despite a lot of criticism.

GVS News Desk