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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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Business

Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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