KARACHI, May 13: Pakistan earned a current account surplus of $2.095 billion in the first nine months of this fiscal year i.e. between July-March 2001-02.
According to the latest balance of payment figures posted on the State Bank’s official website (www.sbp.org.com) the country had posted $82 million deficit in its current account in July- March 2000-01.
If one subtracts the official transfers comprising mostly the aid and grants Pakistan got from the US and other countries after joining the US-led war in Afghanistan then the current account surplus in July-March 2001-02 falls to $921 million. But that too could be a source of pride for the economic managers as in a year ago period the current account surplus minus official transfers was minus $746 million. In other words Pakistan had witnessed a current account deficit of $746 million in July-March 2000-01.
What helped the country post a huge current account surplus in the first nine months of this fiscal year was a sharp fall in trade deficit and in services account plus a big rise in current transfers.
The figures reveal that trade deficit (i.e. the gap between imports and exports values on free-on-board basis) fell to $286 million in July-March 2001-02 from $1.177 billion in a year-ago period. The deficit in services account in the first nine months of this fiscal year stood at $1.810 billion down from $2.469 billion in the corresponding period of the last fiscal year. On top of all this current transfers rose to $4.191 billion from $3.564 billion, thanks largely to higher official transfers: In July-March 2001-02 official transfers totalled $1.182 billion up from $664 million in July-March 2000-01. The bulk of the official transfer $600 million had come from the United States in November 2001 to help Pakistan meet the additional burden on its exchequer after it joined the US “war against terrorism” in Afghanistan following the September 11, 2001 attacks on the US. The US offered more aids as time went by and Pakistan’s involvement in the war increased.
Home remittances or the money sent back home by overseas Pakistanis also shot up to $1.629 billion from $855 million.
The figures show that whereas the country posted a big surplus in its current account in the first nine months of this fiscal year its capital account deficit widened during the same time: In July-March 2001-02 total foreign investment including direct and portfolio investment stood at $4 million only down from $63 million in a year-ago period. What happened during the first nine months of this fiscal year was that whereas the country managed to secure $290 million direct foreign investment there was a huge outflow of $282 million portfolio investment at the same time. Plus direct investment made abroad by Pakistan also stood at minus $4 million.
The figures show that at the end of March 2002 liquid foreign exchange reserves held by the State Bank stood at $3.946 billion up from only $1.436bn at end-March 2001. If one subtracts the foreign currency cash reserves that banks keep with the SBP then the reserves held by the central bank comes down to $3.5bn at end-March 2002 up still from only $891b at end- March 2001.