Finance Minister Ishaq Dar said on Tuesday that Pakistan is now in the ‘safe zone’ after efforts of the incumbent government, which is reflected in the significant decline in current account deficit in fiscal year 2022-23.

In a video message, Dar said the country’s current account posted a fourth successive surplus of $334 million in June 2023, as compared to a deficit of $2.321 billion in the same period last year.

“As a result of these surpluses, the deficit in fiscal year 2022-23 clocked in at $2.56 billion, as compared to $17.48 billion in FY22,” he said.

Dar said the improvement is due to the financial management of the incumbent government.

“We have not only averted a potential default but also ensured timely payments of all international obligations.

“I would laud the efforts of the prime minister and my financial team alongside the central bank’s team for their financial management. These are the reasons why Pakistan averted a default.

“Pakistan is in the safe zone,” said Dar.

The minister shared that the financial team intends to meet its external financial obligation by the end of its tenure.

“Despite these payments, the government also intends to enhance the foreign exchange reserves to $14-15 billion by the end of its tenure, which is set to expire in August,” he said.

China’s Exim Bank rolled over a $600-million loan on Monday, informed Prime Minister Shehbaz Sharif.

This was in addition to over $5 billion in loans that China has rolled over for Pakistan in the last three months, according to Pakistani authorities.

Pakistan has relied on external debt and rollover of loans to help its depleting level of foreign exchange reserves, and also recently entered a shorter, nine-month Stand-By Arrangement with the International Monetary Fund (IMF) after the expiry of its previous bailout programme.