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Pakistan posts CA Surplus of USD 447 Million in November

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December 22, 2020 (MLN): Pakistan has posted a Current Account Surplus of USD 447 Million in November 2020 against a deficit of $326 million in Nov’19, taking the overall surplus for the year to 1.6 billion compared to a deficit of USD 1.7 billion from the corresponding period of last year.

This information was relayed by the Prime Minister through his twitter account.

He further added “SBP's FX reserves have risen to about $13 billion, highest in 3-years”.

Meanwhile, State Bank of Pakistan (SBP), via its twitter account reiterated the same by adding that in contrast to previous 5-years, current account has been in surplus throughout FY21 due to an improved trade balance and a sustained increase in remittances. In Nov20, both exports and imports picked up, reflecting recovery in external demand and domestic economic activity.

This turnaround in the current account, together with improvement in financial inflows, raised SBP’s FX reserves by around $1 billion in Nov20, said SBP.

According to the figures released by SBP, in the month of November’20, the current account surplus was 8% higher than the surplus recorded in the previous month (USD 415 million).

Going into details, the exports of goods increased by 14% MoM and 5% YoY to USD2.22 billion in November while imports also jumped by 17% MoM and 11% YoY to USD4 billion, resulting in a trade deficit of USD1.85 billion. During 5MFY21, the trade deficit was recorded at USD8.6 billion compared to a deficit of USD8 billion during 5MFY20, showing that the deficit worsened by 7% YoY.

The trade deficit in services during November ’20 stood at USD99 million, showing a decline of 65% MoM, as a result of a 15% MoM fall in import services and 18% MoM rise in export services.  On yearly basis, the trade deficit in services shrank by 56% YoY as exports of services surged by 13% YoY and imports of the same dropped by 10% YoY.

On a cumulative basis, the trade deficit in services improved by 38% YoY to clock in at USD925 million during Jul-Nov FY21 when compared to a deficit of USD1.49 billion in Jul-Nov FY20 courtesy of a 18% YoY reduction in imports though the exports also decreased by 6% YoY.

Worker remittances during Nov’20 stood at USD2.34 billion, up by 2% MoM and 28% YoY from USD 2.28 billion in October 2020 and USD 1.82 billion in November 2019. In the first 5 months of FY21, worker remittances improved substantially by 27% YoY to USD11.77 billion from USD9.27 billion in the corresponding period of FY20.

Commenting on the CA Surplus, Mattias Martinsson, the CIO of Tundra Fonder, tweeted “Growing the export base crucial to cope with the inevitable rise in imports down the road. “

 

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Posted on: 2020-12-22T09:25:00+05:00

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