Perhaps organic is not the right word, but I meant to find a word to describe the opposite of what we are seeing here. Allow me to elaborate/clarify, I agree with your assessment, and yes current account situation has improved in the last two years, exports and remittances have been up, while imports have both ‘organically’ and recently due to the other phenomena reduced quite a bit.
However, the resultant current account surplus is not due to underlying strength, it’s largely the result of some current account improvement momentum pre covid. And an economic shock resulting in weak demand and lower imports, as well as low crude prices. Meaning this surplus is not like a surplus we may have seen let’s say had we have worked on massively boosting exports over a period of five to ten years, that’s the dichotomy I was referring to; a real surplus vs one caused largely by a series of covid related shocks which are not positive entirely and have of their own, or result from, other negative consequences.
Also I think the jury’s still out on how much of an export recovery we’re seeing. We had a lengthy discussion with a very knowledgable member here who pointed out that basically Pakistan in recent years only achieved the low hanging fruit of export led recovery which is low value export such as agriculture, which most likely resulted from a weaker exchange rate, these goods are more competitive as a result. The hard work of establishing export industries is not there yet. So I am cautioning from over celebrating this stuff and reading too much optimistically even at this surplus, which I might add is being mirrored elsewhere and not just Pakistan, hence it’s a global phenomenon related to covid shocks, not underlying strength.
