After struggling with deficits for four months in a row, Pakistan’s current account unexpectedly turned positive in November 2023, with a $9 million surplus.
The State Bank of Pakistan (SBP) released data on Monday that showed a $157 million deficit in the same month the previous year, which is a significant difference.
While much smaller in volume than the $520 million surplus during that time, this represents the first surplus since June 2023.
Experts credit this encouraging development to a significant rise in the nation’s exports and remittances, along with a slight decrease in imports.
NOVEMBER SUPRLUS
The November surplus is all the more significant in light of Pakistan’s October 2023 report of a $184 million current account deficit.
According to central bank data, the nation’s exports (goods and services) increased dramatically, rising from $2.999 billion in November 2022 to $3.364 billion in November 2023—a remarkable 12% increase.
In a similar vein, remittances were $2.25 billion, indicating a slight increase of 4% from the same month previous year.
On the other hand, overall imports decreased by almost 6%, from $5.01 billion in November 2023 to $5.29 billion in the same month the previous year.
CURRENT ACCOUNT DEFICIT
The SBP announced a $1.16 billion current account deficit for the July–November period of FY24, a significant decrease of over $2 billion or 64% from the $3.3 billion deficit during the same period in the previous fiscal year (FY23).
The central bank announced a noteworthy improvement in the current account balance during its most recent Monetary Policy Committee (MPC) meeting on December 12. Specifically, the deficit decreased by 65.9% year over year to $1.1 billion from July to October of FY24.
The focus has been on Pakistan, an economically precarious country that is heavily dependent on imports, and the current account, a crucial indicator.
A decreasing deficit protects official foreign exchange reserves, which as of the most recent data are little over $7 billion, and eases pressure on the currency rate.
