July-May current account balance posts $205 million surplus

The country's current account balance registered a surplus of $205 million in the eleven months (July-May) of current fiscal year (2010-11) because of high inflows of home remittance and exports.
"For the first time in the history of the country, remittances sent by overseas Pakistanis have crossed $10 billion mark as some $10.09 billion was remitted in July-May of FY11. The high inflows of remittances have largely contributed to the decline in current account deficit," economists said.
Besides, all time high inflows of remittances, which have average over one billion dollars home remittance during last three months, higher than expected exports of services and goods have also supported the current account balance to become surplus, they added. The State Bank of Pakistan (SBP) on Friday revealed that the country's current account balance has become positive for the third consecutive month and posted a surplus of $205 million in July-May of 2010-11 as compared to $3.402 billion deficit in corresponding period of last fiscal year. However, it's a matter of concern that the surplus amount in first eleven months is less than surplus amount of $748 million in first 10 months (July-April 2011).
During the current fiscal year, for the fourth time the current account deficit has become positive, as earlier in July-December of fiscal year 2011, it was surplus by $26 million. While, current account was surplus by $99 million in July-March 2011 and $748 million in July-April period of current fiscal year.
Economists termed it a good sign for the country's ailing economy saying that a surplus account, despite blockage of International Monetary Fund's SBA tranches for last many months, is a major economic achievement. Month on months basis, the current account posted a deficit of $457 million in May 2011 compared with a surplus of $630 in April this year.
Total deficit of trade, services and income stood at $13.958 billion during the first 11 months of current fiscal year against current account transfers of $14.255 billion. The country's overall goods imports stood at $32.166 billion and exports at $22.781 billion with a trade deficit of $9.385 billion during July-May of fiscal year 2011.
The trade deficit previously stood at $10.214 billion along with $17.883 billion exports and $28.097 billion imports during the same period of FY10. Services sector deficit stood at $1.728 billion with $5.016 billion exports and $6.744 billion imports in July-May of FY11. Similarly, income sector outflows stood at $3.46 billion and inflows at $622 million during the period under review. The SBP has predicted that current account deficit will be less than target and is likely to be about 2 percent of GDP at end of current fiscal year.