Karachi: Cash-strapped Pakistan has shown a surplus of $424 million in July after posting a deficit of $100 million in June, the country’s central bank has said. The State Bank of Pakistan said “this is the fourth monthly surplus since last October.”
The SBP said that the strong turnaround in the remittances and exports is achieved “with support from policy and administrative initiatives taken by the bank and the federal government, the Express Tribune reported. “Pakistan’s current account balance swung into a surplus of $424 mn in July 2020 after posting a deficit of $100 mn in June,” it said.
The export of goods increased to $1.89 billion in July compared to $1.58 billion in June. It was, however, 14 per cent lower than $2.22 billion export in July 2019, according to the central bank. The remittances hit a record high of $2.77 billion in the single month of July compared to $2.47 billion in June and $2.03 billion in July 2019.
The import of goods enhanced by 2 per cent to $3.63 billion in the month compared to $3.56 billion in the previous month. It was, however, 13 per cent lower than $4.18 billion in July 2019, according to the central bank.
Pakistan Prime Minister Imran Khan on Monday said that the change from deficit into surplus was due to recovery in exports and an increase in the remittances.
Next Capital Managing Director Muzammil Aslam said the balance of the current account in surplus is in line with the market expectations. “The growth in workers’ remittances was, however, surprising (in the month of July 2020),” Aslam said. He said the balance in surplus would at least help the economy to absorb shocks if it encounters any unexpected higher import payments in the remaining months of the fiscal year.
The government has targeted to record the current account balance in deficit in the range of 1-1.25 per cent ($3-3.5 billion) in the year 2020-21 compared to 1.1 per cent (around $3 billion) in the previous fiscal year 2019-2020. “The surplus in July has made it easier to achieve the set target of the current account deficit,” he said.