First half of the current fiscal year has offered the country’s dollar-hungry economic managers some relief on the current account balance front that ended up in a surplus of $ 250 million during July-DecFY13.
This surplus was against a huge deficit of $ 2.426 billion the country braved in its current account during the correspondent period of last year, July-DecFY12. As a percent of GDP, the surplus stands at 0.2 percent compared to a deficit of 2.1 percent witnessed in 1HFY12.
According to central bank, war reimbursements worth $ 688 million by the United States on account of Coalition Support Fund (CSF) and persistent growth in the inflow of worker remittances were major attributing factors for the surplus.
“This is because of the receipt of $ 688 million coalition support in December and increasing remittances,” Chief Spokesman of State Bank of Pakistan Syed Wasimuddin told Pakistan Today.
This surplus during December, when the CSF amount was transferred, was recorded at $ 697 million against a deficit of $ 85 million in same month of FY12.
The official figures show that the trade deficit during the review period also decreased to $ 7.614 billion from FY12’s $ 7.895 billion. This marks an across the board slump in the country’s exports and imports the volume of which, respectively, shrank to $ 12.011 billion from $ 12.051 billion and $ 19.625 billion from $ 19.9465 billion of same months in last fiscal year.
The months under review saw the Pakistanis working aboard remitting $ 7.117 billion, up by $ 792 million from last year’s $ 6.325 billion. The economic observers expect that the country’s remittance receipts would accumulate to the historic $ 16 billion by the end the current financial year, FY13.
This augurs well for the cash-strapped Pakistan where lingering uncertainties on the politico-economic and security fronts devalued the rupee to Rs 100 against the greenback on Wednesday. The State Bank on Thursday reported that the country’s liquid foreign exchange reserves had swollen up to $ 13.782 billion.
If compared with last week’s $ 13.558 billion, till January 04, this figure showed an increase of $ 223.6 million or 1.6 percent, certainly an encouraging trend for the country’s economic managers who were said to have started negotiating with the IMF for a fresh loan to avoid a possible default on the balance of payment side.
A break up of dollar reserves showed that during the week in review the central bank held $ 8.950 billion and the commercial banks $ 4.831 billion.
Other heads on the Balance of Payment list depicted a negative trend with foreign disbursements contracting to $ 963 million compared to $ 1.022 billion the country received last year from its foreign lenders and donors.
Of the total 963 million, $ 702 million (against $ 944 million of FY12) came under the head of long-term project loans and $ 5 million as program loans (against $78 million of FY12).
Also, a short-term loan marked the Islamic Development Bank lending to Pakistan $ 256 million during the period under review.
As the economic mangers were desperately striving to entice foreign investors to invest in the country, negatives like deadly politico-sectarian violence, particularly in the financial capital, kept the later at bay.
Yesterday afternoon saw the cold-blooded killing of an elected Member of the Provincial Assembly of Sindh belonging to Muttahida Qaumi Movement in the broad daylight. The deadly incident shut the paranoid city within minutes of the violent happening in Orangi Town neighbourhood. Given swift announcement of today’s closure by the transporters, private school association and the owners of fuel pumps, one could aptly say that the commercial hub would remain closed today. According to trade bodies a one-day closure cost trade and industry in the city at least Rs 5 to 8 Rs billion.
This certainly would take a heavier toll on the country’s ailing economy where demand for bank loans from the private businesses was subdued and much of the bank loans were being sucked up by the funds-starved federal and provincial governments to bridge their ever-burgeoning budgetary expenditures.
Ultimate sufferer, the analysts warn, would be the economic growth that was closely linked to increased economic activity which was only possible when the law and order situation was improved.