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Islamabad, Pakistan’s current account balance showed a surplus of US$9 million in November 2023, but the country continues to face a broader deficit challenge, with the cumulative current account deficit (CAD) for the fiscal year reaching US$1.16 billion.
According to JS Global, the November surplus comes after previous upward revisions in the deficit balance, which led to the five-month fiscal year 2024 (5MFY24) CAD levels increasing from US$1.06 billion reported last month to US$1.16 billion. Despite the positive development in November, the overall balance of payments (BoP) scenario remains challenging.
The BoP deficit for November 2023 was reported at a six-month low of US$540 million, reducing the 5MFY24 BoP to US$1.5 billion, a significant drop from the US$2.5 billion surplus reported until July 2023. This change has also affected the State Bank of Pakistan’s (SBP) foreign exchange reserves, which saw a decrease of US$1.7 billion from a mid-July 2023 high of US$8.7 billion to US$7 billion.
For the fiscal year 2024 (FY24), the current account deficit is expected to widen from US$2.2 billion in FY23 to US$3.5 billion. The report anticipates a positive contribution from exports and a normalization of imports. Remittances, a critical component of Pakistan’s external finances, are expected to record at similar levels to last year, despite higher growth in non-resident Pakistanis (NRPs).
The current account surplus in November is a positive sign but is overshadowed by the larger trend of an expanding deficit, indicating ongoing economic challenges for Pakistan.
The post Pakistan’s Current Account Reports Surplus in November, But Overall Deficit Persists appeared first on Pakistan Business News.