SBP data: Eight-month current account deficit widens to $2 billion
Figures for February show improvement month-on-month.
Shown as a percentage of the gross domestic product (GDP), the current account deficit widened to 1.2% in July-February as opposed to 0.5% in the same period last year. CREATIVE COMMONS
KARACHI:
Pakistan’s current account deficit in the first eight months of the current fiscal year increased to more than $2 billion as opposed to a deficit of $831 million in July-February of 2012-13, according to data released by the State Bank of Pakistan (SBP) on Tuesday.
However, the current account balance for February remained positive ($164 million). In contrast, the current account balance in January was a negative $427 million, the SBP data shows.
Shown as a percentage of the gross domestic product (GDP), the current account deficit widened to 1.2% in July-February as opposed to 0.5% in the same period last year.
The country’s balance of payment (BoP) position was particularly vulnerable until recently mainly because foreign exchange reserves held by the central bank had declined to a critical level of $2.8 billion on February 7. In practical terms, it meant the reserves provided less than one month of import cover. However, SBP-held foreign exchange reserves increased to $4.6 billion by March 7, reflecting a month-on-month increase of 62.7%.
Pakistan exported goods worth $2 billion in February as opposed to exports totaling $2.1 billion in the preceding month, reflecting a month-on-month decrease of 4.1%. For the July-February period, however, exports increased to $16.7 billion, up 3.7% from $16.1 billion recorded in the corresponding eight-month period of 2012-13.
The country’s total imports of goods in February were $3.1 billion as opposed to $3.5 billion in January, which means a decrease of 12.2% in one month. For the July-February period, imports increased to $27.6 billion, up 4% from $26.5 billion in the corresponding eight-month period in 2012-13.
Workers’ remittances remained $1.2 billion in February, slightly down (2.9%) from the preceding month. Workers’ remittances in July-February increased to $10.2 billion, registering an increase of 10.9% over the corresponding eight-month period in the preceding fiscal year when they totalled $9.2 billion.
A favourable current account balance in the last month can partially be attributed to an improvement in foreign investment flows. Pakistan received foreign direct investment (FDI) of $606.3 million in the first eight months of 2013-14, which is 17.9% higher than the amount it received in July-February 2012-13.
Just like the current account balance that improved significantly in February, FDI also recorded a sharp increase last month. It amounted to $79.2 million in February as opposed to an outflow of $14 million in the same month of the preceding fiscal year.
Published in The Express Tribune, March 19th, 2014.
Pakistan’s current account deficit in the first eight months of the current fiscal year increased to more than $2 billion as opposed to a deficit of $831 million in July-February of 2012-13, according to data released by the State Bank of Pakistan (SBP) on Tuesday.
However, the current account balance for February remained positive ($164 million). In contrast, the current account balance in January was a negative $427 million, the SBP data shows.
Shown as a percentage of the gross domestic product (GDP), the current account deficit widened to 1.2% in July-February as opposed to 0.5% in the same period last year.
The country’s balance of payment (BoP) position was particularly vulnerable until recently mainly because foreign exchange reserves held by the central bank had declined to a critical level of $2.8 billion on February 7. In practical terms, it meant the reserves provided less than one month of import cover. However, SBP-held foreign exchange reserves increased to $4.6 billion by March 7, reflecting a month-on-month increase of 62.7%.
Pakistan exported goods worth $2 billion in February as opposed to exports totaling $2.1 billion in the preceding month, reflecting a month-on-month decrease of 4.1%. For the July-February period, however, exports increased to $16.7 billion, up 3.7% from $16.1 billion recorded in the corresponding eight-month period of 2012-13.
The country’s total imports of goods in February were $3.1 billion as opposed to $3.5 billion in January, which means a decrease of 12.2% in one month. For the July-February period, imports increased to $27.6 billion, up 4% from $26.5 billion in the corresponding eight-month period in 2012-13.
Workers’ remittances remained $1.2 billion in February, slightly down (2.9%) from the preceding month. Workers’ remittances in July-February increased to $10.2 billion, registering an increase of 10.9% over the corresponding eight-month period in the preceding fiscal year when they totalled $9.2 billion.
A favourable current account balance in the last month can partially be attributed to an improvement in foreign investment flows. Pakistan received foreign direct investment (FDI) of $606.3 million in the first eight months of 2013-14, which is 17.9% higher than the amount it received in July-February 2012-13.
Just like the current account balance that improved significantly in February, FDI also recorded a sharp increase last month. It amounted to $79.2 million in February as opposed to an outflow of $14 million in the same month of the preceding fiscal year.
Published in The Express Tribune, March 19th, 2014.