December 2013 period: current account

balance posts $285 million surplus

January 22, 2014
RECORDER REPORT
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The country's current account balance posted a $285 million surplus in December 2013,
mainly due to rising foreign inflows. Economists said that surplus current account is a
positive indication for the economy, which is already facing several challenges such as
slow growth, energy crisis, declining forex reserves and poor law and order situation.
The current account balance is posting massive deficit since August largely contributed
by high goods imports and slow foreign inflows, they said and added that "a surplus
current account is necessary to avert risks to external account." "We believe that continuous decline in the current account deficit
would also help build depleting foreign exchange reserves," they added.
According to State Bank of Pakistan, the country's current account balance posted a $285 million surplus in December 2013 as
compared to $572 million deficit in November 2013. This is the second surplus during this fiscal year as previously in July
2013, current account posted a $46 million surplus.
However, year-on-year basis, the country's current account balance registered a deficit of $1.589 billion during first half of this
fiscal year (FY14) compared to $83 million in the same period of last fiscal year (FY13), depicting an increase of 1,814 percent
or $1.506 billion. During the period under review, overall deficit of trade, services and income stood at $11.7 billion against
current account transfers of $10.113 billion.
The country had received over $1.8 billion inflows from US on account of Coalition Support Fund (CSF) during first half of FY13
and these inflows supported the external account to post a low deficit.
The country's overall goods imports posted a trade deficit of $8.304 billion with $20.852 billion imports and $12.548 billion
exports in first half of FY14. Services sector deficit mounted to $1.431 billion with $2.38 billion exports and $3.819 billion
imports in July-December of current fiscal year compared to a deficit of $47 million in the corresponding period of last fiscal
year. Similarly, income sector outflows stood at $2.268 billion and inflows at $301 million, depicting a deficit of $1.96 billion
during the period under review.
Copyright Business Recorder, 2014
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