Pakistan managed to maintain a current account surplus during the first nine months of the current fiscal year (9MFY21), indicating that the fiscal year might end without an overall deficit.
However, according to data issued by the State Bank of Pakistan (SBP), although the country posted a surplus of $959 million during the July-March period, it also posted a current account deficit of $47 million in March for the fourth month in a row, slightly higher than that of February at $31m. In January the deficit stood at $229m while the deficit in December 2020 was $625m.
As opposed to surplus in this fiscal, the current account deficit in the first nine months of the previous fiscal (FY20) was $4.147bn.
Exports of goods have shown no significant improvement during the first nine months of the current fiscal; exports of goods were at $18.7bn compared to $18.3bn in the same period of last fiscal.
However, imports of goods have shown a strong growth as it has reached $37.4bn against $34.1bn in the same period of last fiscal. The balance on trade in goods is negative, with $18.657bn compared to $15.855bn in the previous fiscal.
Pakistan has been getting robust support from overseas Pakistanis, who have been remitting over $2bn per month during the current fiscal. In the first nine months of FY21, the country received $21.5bn, a growth of 26 per cent when compared to last year’s remittances. The government expects to receive over $28bn by the end of the current fiscal, which would be much higher than the total proceeds from exports.
It is pertinent to mention here that the IMF has predicted a growth rate of 1.5pc for FY21, while the World Bank has forecast a rate of only 1.3pc. The SBP, on the other hand, has stuck to its earlier stance that growth rate will be 3pc.