Pakistan’s Current Account Posts Surplus of $397ml in December 2023: SBP

KARACHI: In December 2023, Pakistan's current account showed a noteworthy $397 million surplus, which put the country's whole second quarter of the current fiscal year FY24 in positive territory with a $198 million surplus. Higher exports, more remittances, and a sharp drop in imports were the main causes of the December surplus which helped the country overcome the most urgent economic problem that had put it on the verge of default at the start of FY24.

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The State Bank of Pakistan (SBP), which released its most recent figures on Wednesday, stated that the December surplus was in contrast to a $365 million net loss in December 2022. Additional information revealed that the current account deficit (CAD) for the current fiscal year's first half was $831 million. In the same period of the previous fiscal year, it was $3.63bn.

The government has accomplished much with this, as the CAD shrank by 77 per cent, or $2.8 billion. According to financial circles, lowering the CAD might result in an overall surplus by the conclusion of the current fiscal year. Nonetheless, a 1.5% GDP deficit was anticipated by the SBP. The balance of trade in goods and services for the first half of the current fiscal year was $11.382 billion, a $4.244 billion decrease from the same period the previous year when it was $15.636 billion, according to SBP data. The first quarter of FY24 (July–Sept) saw a $1.029 billion deficit in the current account; however, the second quarter (Oct–Dec) showed a $198 million surplus. This shift is essential to the economy.