Surplus of $136 million in Current account balance

[ameer219]

Current account balance posts surplus of $136 million

RECORDER REPORT

KARACHI (June 18 2010): The country's current account balance has become surplus primarily driven by massive decline in goods and services trade deficit, besides record home remittances. The State Bank of Pakistan on Thursday revealed that the current account balance has posted a surplus of $136 million during May 2010 as compared to some $252 million deficit during April 2010.

During May 2010 overall deficits of goods, services and income trade stood at $790 million over the current account transfers of $939million, showing a surplus of $136 million in May 2010. The country's overall current account deficit also presented progress as it has narrowed down by some 66 percent in first 11 months of current fiscal year.

According to the SBP, current account deficit declined by $5.698 billion during July-May of FY10, as compared to same period of FY09. With current decrease, the country's overall current account deficit has narrowed to $2.981 billion in the first 11 months of current fiscal year relative to a deficit of $8.679 billion in the same period of FY09.

Overall deficit including trade, services and income stood at $14.497 billion against the current account transfers of $11.620 billion in July-May of FY10. With $27.937 billion goods imports and $17.855 billion exports, overall goods trade deficit stood at $10.082 billion during first 11 months of current fiscal year as compared to a deficit of $11.642 billion in corresponding period of last fiscal year. In addition, goods exports posted an increase of $542 million while imports registered a decrease of $1.07billion in the same period of current fiscal year.

Services sector also presented a significant improvement as its deficit stood at $1.408 billion with $4.768 billion exports and $6.176 billion imports in July-May of current fiscal year relative to a deficit of $3.059 billion in same period of last fiscal year.

Similarly, income deficit also declined to $3 billion from $4.1 during the period, as during July-May 2010 altogether income from abroad stood at $519 million as compared to payments of $3.526 billion to the overseas. Statistics show current account deficit without official transfers reached $3.429 billion during the first 11 months of FY10 as compared to $8.824 billion in same period of FY09.

Economists said despite some reservations, the country received all-time high remittances during the current fiscal year, while rising exports and decline in imports has also helped reduce trade deficit. They said record remittances and massive cut in imports have contributed greatly to lessening the current account deficit, which was about $9 billion by end of last fiscal year.

Copyright Business Recorder, 2010
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[lhuang]

Not a good sign, the country is not importing.

 

[TechLahore]

Good! The rather spectacular rise in inbound remittances has really made a big difference!

 

[Justin Joseph]

Good! The rather spectacular rise in inbound remittances has really made a big difference!

Yeah that's true no doubt about it. But the foreign aid/donations also has a big role in it. And together these two factors changed the picture in comparison to last year.

 

[bc040400065]

Yeah that's true no doubt about it. But the foreign aid/donations also has a big role in it. And together these two factors changed the picture in comparison to last year.

Dear trade deficit cannot be decreased with aid and donations. you i think missed the point of the report, which is about increase in exports and decrease in imports . also increase in remmitances. so for once please stop pointing AID/Donation thing. See the positive side.

 

[faisaljaffery]

Massive decline in imports and improvement in exports along with foriegn remitences have played a pivotal role in narrowing down the current account deficit. but still v need to bridge the gap b/w imports and exports which is hovering around $ 10 billion. Once Pakistan is able to bridge this gap, then v do not need to borrow money from IMF and other Internaltional lending agencies.

 

[ice_man]

Good! The rather spectacular rise in inbound remittances has really made a big difference!

all thanks to WoT i guess!!! since US wanted every nation in the world to ensure that HUNDI,HAWALA system ends & all monetary transactions are transparent!!hence the arab countries as well as pakistan HAD TO FOLLOW the international procedures!! and Zarco exchange & others were closed down!!!

so this "increased" remittance is actually NOT an increase in monetary terms its just more an increase in transparency or like we say in pakistan WHITE MONEY!!

 

[Evil Flare]

Not a good sign, the country is not importing.

We dont want to waste our money on luxury Imports ...

 

[Indiarox]

Good for Pakistan.
May you people get richer and more self reliant.

 

[Cheetah786]

Yeah that's true no doubt about it. But the foreign aid/donations also has a big role in it. And together these two factors changed the picture in comparison to last year.

wow dude even at the expense of coming across as an idiot you still took a shoot at Pakistan well you have achived your goal and u do come across as.

 

[su-47]

Yeah that's true no doubt about it. But the foreign aid/donations also has a big role in it. And together these two factors changed the picture in comparison to last year.

justin, aid doesnt count towards trade. so if trade deficit decreases, that is due to pakistan exporting more or importing less.

And its a myth that Pakistani economy is reliant on aid. While the aid makes things better, the economy will survive without it.