Pakistan’s current account posts 3rd monthly surplus in 11 months

Pakistan’s current account swung back to surplus for the third time since October 2019, the State Bank of Pakistan said. An important gauge to measure the health of our economy, the current account records our dollar transactions with the rest of the world.

In Pakistan’s case, it is usually in deficit or loss because it spends more dollars than it earns. As per latest data, the country recorded a surplus of $424 million in July, a turnaround from a deficit of $100 million the preceding month. Last time surplus of $344 million was recorded in May 2020.

All thanks to a record high amount of remittances the country received in last month.

Pakistanis abroad sent home remittances worth $2.77 billion in July, which was the highest amount of dollars Pakistanis overseas have ever sent back to their families. Another factor that helped improve the current account situation was exports.

Exports went up 19.7 per cent in July, after a 25.5 per cent growth in June. This happened because coronavirus cases dropped in Pakistan and many countries such the UAE started importing from us again.

Reducing the current account deficit has been the greatest problem for the Pakistan Tehreek-e-Insaf government since it came into office in August 2018. Since we spent two dollars for every dollar earned, this was not sustainable as it led to a high current account deficit.

The country is then left with fewer dollars to pay for imports such as oil and service foreign debt, which has to be repaid in dollars. Failing to do so can lead to a sovereign default.

The IMF programme opened more doors for Pakistan as the World Bank, Asian Development Bank and Asian Infrastructure Investment Bank also pledged support to the country. According to the IMF, the bailout programme was supposed to unlock an additional funding of $36 billion over the life of this programme.

Oil and Gas: Oil and Gas Development Company Limited (OGDCL) on Monday announced to discover new reserves of oil and gas in Pakistan.

According to sources privy to the details, the new discoveries of oil and gas reverses have been made in Kohat district of the Khyber Pakhtunkhwa (KP) province.

“Nine mmcfd gas and 125 barrel oil will be obtained daily from well number 1 in Togh Bala, an administrative unit of Kohat district,” the sources said. The OGDCL officials involved in the exploration process said that it was the second consecutive successful exploration in the Kohat block. Discovery of the reserves from well number 1 was achieved after adopting a successful strategy, they said.

The new discovery will help the country in saving foreign reserves to a large extent and would also improve the oil and gas reserves held by the OGDCL.

In July 2020, the OGDCL claimed that it has discovered five new reserves in Pakistan.

According to details, the five new oil and gas deposits were discovered in Kohat, Sukkur, Shakardara and adjoining areas in one month.

1040 barrels of crude oil, 47 million cubic feet of gas per day were extracted from the new reserves and the newly discovered reserves have been added to the national supply network.

News Network International