Islamabad: Prime Minister Imran Khan has said that Pakistan's economy was on the right track since country's current account balance, the difference between government's foreign income and expenditure recorded a surplus of $424 million in July.
MashaAllah Pakistan's economy is on the right track, PM Imran Khan said in a tweet. After current account balance posted deficit of $613 million in July 2019 & a deficit of $100 million, in July 2020 current account balance swung upwards to a surplus of $424 million.
The Prime Minister added that the strong turnaround was a result of continuing recovery in exports, that rose 20 per cent compared to June 2020, and record remittances. In June, it was reported that after a gap of seven months, Pakistan's current account balance once again turned into a surplus of $13 million in May 2020 but at the expense of economic growth.
The surplus was primarily achieved after Pakistan's export earnings dropped to a 13-year low at $1.27 billion and import payments fell to a 10-year low at $2.8 billion in May, BMA Capital Executive Director Saad Hashmi said. The slowdown in imports and exports clearly indicated a significant drop in economic activities in response to the coronavirus pandemic, he said.
Besides, improvement in the receipt of workers' remittances, decline in trade deficit of services and increase in other current transfers (remittances received through currency dealers) helped to turn the current account balance into a surplus from deficit.
Pakistan achieved current account surplus of $13 million in May compared to a deficit of $530 million in the previous month of April and $1 billion in May 2019, the State Bank of Pakistan (SBP) reported. With this, the current account deficit narrowed 73.6 per cent to $3.29 billion in the first 11 months (July-May) of outgoing fiscal year 2019-20 compared to $12.45 billion in the same period of last year.
The significant drop in exports is indicating a massive hit to local economic activities amid the Covid-19 pandemic, he said. The government immediately set its focus on increasing exports by finding new markets, introducing value-added products in export markets and through policy initiatives, he added.