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Pakistan on Wednesday reported a current account surplus of $654 million in March, primarily due to ongoing restrictions on imports and an expected increase in remittances during the month of Ramzan.
According to data issued by the State Bank of Pakistan (SBP), last month marked the first time the country’s current account has reported a surplus since November 2020. It added that $654 million was the highest surplus recorded in the country since February 2015.
Overall, Pakistan’s current account deficit for the first nine months of the ongoing fiscal year has been recorded at $3.4 billion, a 74.1 percent decline from July-March 2022. However, analysts have warned, the surplus has come on the back of reduced economic growth, as it is primarily motivated by import restrictions that have played havoc on the industrial sector due to a dearth of raw materials. This, they have warned, has boosted unemployment as manufacturing units suspend operations or are shuttered entirely. Per the SBP, imports of goods fell 34.7 percent year-on-year in March, hitting $4 billion.
At the same time, Pakistan witnessed an expected increase in remittances to $2.5 billion, which traditionally happens during Ramzan. However, this was still a 10.7 percent decline, year-on-year, from March 2022.
Exiting economic crisis
Addressing an event in Saudi Arabia on Wednesday, Finance Minister Ishaq Dar credited the ruling coalition’s “strategy” for steering the country out of its economic crisis. Slamming the ousted Pakistan Tehreek-e-Insaf (PTI) government, he said it had “brought the country to the brink of default” and the incumbents had sacrificed their political capital to save the nation.
“To all those chanting ‘default, default,’ listen, Pakistan will never default,” he stressed, adding that the government had repaid $11 billion in debt in the last six months. He also reiterated that Pakistan had completed all prior conditions to revive a stalled bailout with the International Monetary Fund (IMF).