During the first six months of the fiscal year, direct foreign investment showed an increase by 6.4 times, amounting to 211 million dollars. Photo: File
KARACHI: Pakistan’s current account remained in surplus in December, with a surplus of 397 million dollars, improving Pakistan’s position for international payments. However, the result was also reflected in the economic slowdown. The fundamental reason for the increase in the current account surplus is the increase in remittances and a decrease in imports.
According to the State Bank, Pakistan faced a loss of 15 million dollars in the month of November in the current account, resulting in a reduction in the overall current account deficit for the first six months of the fiscal year, which stood at 831 million dollars, compared to 3.63 billion dollars during the same period last year.
This shows a 77% improvement in the current account on an annual basis. Speaking to Express Tribune, Yousaf Rahman, head of research at KSB Securities, said that the fundamental reason for the current account surplus in December is the decrease in imports. In December, imports amounted to 4.09 billion dollars, compared to 4.44 billion dollars in November, while remittances also increased to 2.38 billion dollars, compared to 2.26 billion dollars in November. He said that the decrease in imports has frozen economic activities in the country.
He said that it is possible for the overall current account deficit for the current fiscal year to be less than 1% of GDP (2.5 billion dollars), while the IMF has estimated it to be 1.6% (5.7 billion dollars). In addition, in December, direct foreign investment, including in power, oil, and gas sectors, increased by 6.4 times, amounting to 211 million dollars, compared to just 33 million dollars during the same period last year.
This increase is 61% higher than November, and during the first six months, overall direct foreign investment has increased by 35% with a total of 863 million dollars, compared to 640 million dollars during the same period last year.