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Current account deficit declines to $8 million in September

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KARACHI: Pakistan’s current account deficit narrowed to $8 million in September, a 98% drop from last year, as remittances from overseas Pakistanis and lower imports boosted the country’s external balance, The News reported Friday citing the State Bank of Pakistan (SBP) data.

As per the data, Pakistan registered a deficit of $360 million in September 2022. In September of this year, the current account deficit decreased by 95% on a month-on-month basis. The shortfall was $164 million in August.

Despite the nominal deficit reported by the country, analysts had predicted a surplus in the current account balance.

“The improvement (in CAD) has come mainly due to higher remittances and lower imports,” said Fahad Rauf, the head of research at Ismail Iqbal Securities.

“The remittances are expected to increase further in October as the gap between open market and interbank has been addressed,” Rauf added. “We expect the CAD to remain low and might turn into a surplus in October.”

The country’s trade deficit fell 46.85% to $1.518 billion in September compared to the $2.856 billion it registered a year earlier.

According to the SBP’s data, Pakistan’s total imports declined 19% year-on-year to $4 billion in September. While the imports declined by 7% on a monthly basis.

With a 2% increase to $2.474 billion in September from $2.437 billion in September of last year, total exports indicated a little improvement. September’s exports increased by 2% on a month-on-month basis.

Remittances rose to $2.2 billion in September from $2.5 billion in the previous month. These inflows saw a 11% increase over the same month last year. 

In the first quarter of this fiscal year, the nation recorded a $947 million current account deficit, which is 58% less than it was a year earlier.

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With its second-largest surge ever, PSX approaches 114,000 points.

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Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

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In interbank trade, the Pakistani rupee beats the US dollar.

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In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

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Phase II of CPEC: China-Pakistan Partnership Enters a New Era

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The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.

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