KARACHI: Pakistan posted a $73 million current account surplus in September compared to $211m in August, which was revised downwards from $297m announced earlier, latest data released by the State Bank of Pakistan (SBP) showed on Wednesday.

However, the country, after a gap of more than five years, posted a quarterly current account surplus of $792m during 1QFY21 against a deficit of $1.492 billion recorded in the same period last fiscal year.

The country had last posted a $514m surplus in third quarter of FY15.

Prime Minister Imran Khan said the record current account surplus in the first quarter of current fiscal year was “great news for Pakistan” while adding that “we [Pakistan] are headed in the right direction.”

According to the SBP data, total exports of goods and services during the 1QFY21 increased by 29 per cent or $547m to $2.414bn. Meanwhile, exports during the same period last year were $1.867bn.

The data showed that the surplus was mainly due to higher remittances during the quarter under review.

In addition, lower imports also helped improve the current account balance. The import — only goods — growth in the 1QFY21 showed a decline of 3.8pc against 20.6pc decline in the same quarter of last fiscal year.

Total imports — goods plus services — increased by $452m to $4.358bn in September; an increase of 11.6pc compared to the same month of last fiscal year.

Moreover, imports — goods plus services — during 1QFY21 declined by 8.1pc compared to the same quarter of last fiscal year. However, the primary factor leading to the current account surplus was 31pc increase in remittances during the quarter under review. The country received $7.147bn in the first quarter compared to $5.452bn of the last fiscal year.

Pakistan has been receiving remittances over $2bn per month since the last four months which helped retain the country’s foreign exchange reserves and maintain a current account surplus.

In September, Pakistan received $2.284bn from overseas workers, marking a jump of 9pc month-on-month basis while it was 31pc higher on year-on-year basis.

The financial circles believes that some of the possible reasons for this uptick are suspension of international travelling, crackdown on illegal channels of remitting and workers sending money to their families more than usual during the pandemic.

On the other hand, foreign direct investment (FDI) flows into the country remained lacklustre during the three months, falling by 24pc to $415.7m compared to $545.5m same period last year.

In the first two months of current fiscal year, the FDI flows increased by 40pc compared to the same period of last fiscal year. However, outflows in September resulted in a net fall of 24pc FDI during the quarter.

Published in Dawn, October 22nd, 2020