By: Maria Mansab

In a remarkable turnaround, Pakistan’s current account revealed a surplus of $9 million in November 2023, a stark contrast to the $157 million deficit recorded the previous year, according to the State Bank of Pakistan (SBP).

This surplus is attributed to a significant increase in the country’s exports and remittances, as well as a decrease in imports. According to SBP data, the country’s exports (goods and services) increased by 12% in November 2023 to $3.364 billion, up from $2.999 billion in November 2022.

At the same time, remittances amounted to $2.25 billion, indicating a 4 percent rise compared to the same month in the previous year. Moreover, there is an approximately

6 percent decrease in overall imports to $5.29 billion in November 2023, compared to $5.01 billion in the previous year.

The decrease in the current account deficit attributed to economic stability, and investor confidence, ensures currency stability and reduces dependence on external finance. The government’s implementation of rigorous monetary and fiscal policies, along with strict administrative measures, has led to a notable enhancement in the current account balance over the initial five months of the financial year 2024.

It is imperative to acknowledge that the high-profile $100 billion five-year initiative of the Special Investment Facilitation Council (SIFC) has facilitated economic stability and attracted foreign investments in Pakistan. Notably, Saudi Aramco, the entity responsible for managing the largest network of hydrocarbon resources, has purchased a 40 percent ownership interest in Gas and Oil Pakistan Ltd. by investing $100 million. Similarly, Etisalat, the Emirati multinational telecommunications services provider and the 18th largest mobile network operator in the world is investing $400 million to acquire 100 percent of Telenor Pakistan (Pvt.) Limited.

Additionally, Shanghai Electric Group Company Limited, a multinational firm that focuses on power production and manufacturing electrical equipment, has successfully secured $2 billion in financing for Pakistan’s largest Thar coal-fired power project. This project has a capacity of 1,320 MW. This program is expected to produce electricity at a cost-effective rate of Rs 5 per unit, leading to yearly savings of almost $500 million.

In October, the Pakistan stock market demonstrated exceptional performance on a global scale in terms of monetary value, as listed companies reported a combined profit of Rs 420 billion. In the July-October quarter, the Federal Board of Revenue (FBR) exceeded the revenue goal for the fourth consecutive month, with a collection of Rs 2.75 trillion. In December, Pakistan’s cotton production hit its highest point of 8 million bales, representing a notable 74 percent growth compared to the previous year.

In addition, the international rating agency Fitch has upheld Pakistan’s long-term foreign currency issuer default rating at “CCC+.”. The stability in the rating indicates the international community’s confidence in the current government’s policies, underscoring the significance of maintaining economic policies and developments.

Pakistan’s trajectory towards sustainable development is becoming more evident, gaining international recognition and laying the groundwork for a successful future. The government’s unwavering commitment to combating illegal activities, particularly in the Afghan transit sector, has not only improved national security but also brought about significant changes in the economic environment. Nevertheless, robust countersmuggling measures have successfully revitalized the economy, with the dollar falling from Rs315 to Rs276, signaling economic stabilization.

Multiple sector expansions, including mining, energy, agriculture, regional exports, textile imports, and international investments, have strengthened Pakistan’s economy. The Special Investment Facilitation Council (SIFC) has launched a business- and investorfriendly visa service, facilitating international entrepreneurs seeking to operate in the country through financial investments and paving the way for digital transformation.

While there has been improvement in inflationary trends, exchange rates, and fiscal deficits, it is crucial to recognize that these are preliminary steps towards sustained recovery. Therefore, it requires the continuation of fiscal policies.

It is imperative to acknowledge that this period of stability is a foundation upon which further economic reforms must be built. Deviation from these implemented policies could undermine the trajectory of fiscal stability, potentially eroding the global community’s confidence in Pakistan and jeopardizing foreign investments.