Pakistan’s current account has posted a substantial surplus of $397 million in December 2023, a stark contrast to the $15 million deficit recorded in November. This positive shift is attributed to increased exports and remittances, coupled with a marginal decline in imports.
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DECEMBER 2023 PERFORMANCE:
Exports Surge: The country’s exports (goods and services) witnessed an impressive surge, reaching $3.526 billion in December 2023, reflecting a growth of over 14% compared to December 2022’s $3.089 billion.
- Remittances Increase: Remittances for December 2023 stood at $2.38 billion, marking a marginal increase of 13% from the same month in the previous year.
- Decline in Imports: Total imports experienced a slight dip, down by 2% to $4.97 billion in December 2023, compared to $4.98 billion in the corresponding period last year.
Current account surplus of $0.40 billion has been recorded in Dec 2023. Cumulatively, current account deficit improved significantly to $0.83 billion in H1FY24 compared to 3.63 billion in H1 FY23.https://t.co/q3LNv3HOB0https://t.co/Od8ikVvXrd#SBPBOP pic.twitter.com/GWaRBApMoC
— SBP (@StateBank_Pak) January 17, 2024
JULY-DECEMBER FY24 PERFORMANCE:
- Massive Decline in Deficit: The data from the State Bank of Pakistan (SBP) reveals a significant improvement in the current account balance for the period July-December of FY24. The deficit stands at $831 million, a substantial decline of over $2.8 billion or 77% compared to the same period in the previous fiscal year.
MONETARY POLICY COMMITTEE (MPC) INSIGHTS:
- The SBP’s Monetary Policy Committee (MPC) meeting in December noted a remarkable improvement in the current account balance, with the deficit narrowing by 65.9% year-on-year to $1.1 billion during Jul-Oct FY24.
SIGNIFICANCE FOR PAKISTAN’S ECONOMY:
The current account surplus is a pivotal development for Pakistan, a nation heavily reliant on imports. A surplus eases pressure on the exchange rate and contributes to maintaining official foreign exchange reserves. The positive trend in trade and financial indicators underscores a resilient economic outlook, offering optimism for continued stability and growth.