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C/A records surplus of $99m in July-March
By Muhammad Yasir
KARACHI: Pakistans current account has once again showed a positive development with surplus of $99 million in July-March period amid strong support of remittance and exports value, State Bank of Pakistan (SBP) statistics reported. The current account had reported a huge deficit of $3.106 billion in the same period last year, the central bank said on Monday.
In March, the current account was a provisional surplus of $347 million compared with a deficit of $2 million in February 2010.
Higher exports values and accelerated growth in remittance inflows are attributed to the surplus of current account at present level, which are likely to retain its narrow position in the remaining months of current fiscal year.
Exports and remittance have showed handsome growth of 25 and 22 percent in July and March compared with the values of the same period last fiscal year. The exports figures stood at $17.94 billion whereas workers remittance surged to $ 8.04 billion in the said period.
The strong exports and remittances inflows are strengthening the position of rupee against dollar and stable foreign exchange reserves, Sayem Ali, Country Economist of Standard Chartered of Pakistan said. The rupee is likely to continue a positive trend of appreciation in the next couple of months on the back of strong macro income indicators such as export and remittance, he said and added the current account may continue to be in surplus but it will remain under control as shrinking position.
Pakistans exports are high owing to handsome values of its cotton in the developed market witnessing recovery period as against local market with dampening demand. But it has offset the impact of skyrocketing prices of petroleum products and palm oil, Ali said. The commodity led export may retain its spree in future as local production of exportable products are not reflecting impressive performance and remain in crisis because of energy deficit, he said while pointing out banks credit to private is declining couple with slump in foreign direct investment.
The current account showed surplus of $26 million earlier for the period of July-December 2010-11. The current account deficit for the fiscal year 2009-10 was $3.946 billion compared with $9.261 billion in fiscal year 2008/09. The current account deficit is likely to be less than 2 percent of the GDP, which is remarkable achievement given the fact that just two years back the deficit was almost 6 percent of GDP, the SBP in its report said.
However, there is no room for complacency as the existing decline is mainly due to transitional reasons such as higher exports income that has down the trade deficit at present stage.
If the deterioration in the current account occurs in future, the financial account in its present state may not able to support it and the country would have to fall back on its reserves which are currently lending stability to exchange rate, the report said.
Daily Times - Leading News Resource of Pakistan
By Muhammad Yasir
KARACHI: Pakistans current account has once again showed a positive development with surplus of $99 million in July-March period amid strong support of remittance and exports value, State Bank of Pakistan (SBP) statistics reported. The current account had reported a huge deficit of $3.106 billion in the same period last year, the central bank said on Monday.
In March, the current account was a provisional surplus of $347 million compared with a deficit of $2 million in February 2010.
Higher exports values and accelerated growth in remittance inflows are attributed to the surplus of current account at present level, which are likely to retain its narrow position in the remaining months of current fiscal year.
Exports and remittance have showed handsome growth of 25 and 22 percent in July and March compared with the values of the same period last fiscal year. The exports figures stood at $17.94 billion whereas workers remittance surged to $ 8.04 billion in the said period.
The strong exports and remittances inflows are strengthening the position of rupee against dollar and stable foreign exchange reserves, Sayem Ali, Country Economist of Standard Chartered of Pakistan said. The rupee is likely to continue a positive trend of appreciation in the next couple of months on the back of strong macro income indicators such as export and remittance, he said and added the current account may continue to be in surplus but it will remain under control as shrinking position.
Pakistans exports are high owing to handsome values of its cotton in the developed market witnessing recovery period as against local market with dampening demand. But it has offset the impact of skyrocketing prices of petroleum products and palm oil, Ali said. The commodity led export may retain its spree in future as local production of exportable products are not reflecting impressive performance and remain in crisis because of energy deficit, he said while pointing out banks credit to private is declining couple with slump in foreign direct investment.
The current account showed surplus of $26 million earlier for the period of July-December 2010-11. The current account deficit for the fiscal year 2009-10 was $3.946 billion compared with $9.261 billion in fiscal year 2008/09. The current account deficit is likely to be less than 2 percent of the GDP, which is remarkable achievement given the fact that just two years back the deficit was almost 6 percent of GDP, the SBP in its report said.
However, there is no room for complacency as the existing decline is mainly due to transitional reasons such as higher exports income that has down the trade deficit at present stage.
If the deterioration in the current account occurs in future, the financial account in its present state may not able to support it and the country would have to fall back on its reserves which are currently lending stability to exchange rate, the report said.
Daily Times - Leading News Resource of Pakistan
