Pakistan has been able to maintain a current account surplus for the first nine months of the current fiscal year (9MFY21), suggesting that the fiscal year could end without a significant deficit.
A per the data from State Bank of Pakistan (SBP), Pakistan recorded a surplus of $ 959 million from July’2020 to March’2021 period , however recorded a current account deficit of $ 47 million in the month of March-2021, slightly more than USD 31 million in February-2021. The deficit was $ 229 million in January, compared with $ 625 million in December 2020.
In contrast to the surplus in a given financial year, the current account for the first nine months of the previous financial year (FY 20) in deficit of $ 4.147 billion.
Exports of goods did not improve significantly in the first nine months of the current financial year. Exports of goods were $ 18.7 billion, compared to $ 18.3 billion for the same period last financial year marking muted frowth of just 2% YoY.
However, import growth was strong at $ 37.4 billion from $ 34.1 billion in the same period last year. Hence, Trade Deficit remained at $ 18.657 billion, compared to $ 15,855 billion in the previous financial year.
Pakistan has remained successful in bridging the external deficit from strong remittances which has remained above $ 2 billion each month in the fiscal year. In the first nine months of fiscal year 2021, Pakistan received $ 21.5 billion in overseas remittances, marking a massive increase of 26 percent from money transfers as compared to last yearlast year. The government expects to receive more than $ 28 billion by the end of the current fiscal year, which would be much more than total export earnings.
International Monetary Fund expect GDP growth of 1.5 percent for fiscal year 2021, while the World Bank expected growth of only 1.3 percent. The SBP, on the other hand, maintained its growth rate of 3 percent with upside risks.