Current Account Records A Huge Surplus of Over $800 Million in July-Aug 2020

[volatile]

Actually no Hajj this year saved some money too but nevertheless good development.

lot of Saudi Rayal some sources quote 3.5 Billion Rayal which went outside were actually remain in Pakistan .Good news Umrah will be opening from 1st Nov

 

[Pandora]

At this point, any major economy except maybe China, posting a surplus is never a good sign. Unless the export grew in double digit and the import is at a state before Feb 2020. I've seen many in here jumping up and down seeing India posting a surplus after 10-20 years, but didn't realize it's the worst economic hit in 70 years mainly due to demand glut in Jewelry and oil. As soon as it's reversed the deficit went positive.

Only thing is that import didnt fall as much as you would hope mainly bcz Pakistan didn't enforce a severe lockdown like India. Our lockdown was for four weeks which wasn't even enforced. Main reason behind surplus is a consistent trend in increase of exports and foreign remittances. Imports don't really have much room to shrink after strict measures by govt last year to curtail imports. Main reason behind increased remittances is cash strapped populace either bcz they lost jobs or spent all their saving during corona pandemic. I my self had to send almost double the amount mainly bcz some family members were having tough time with their business and jobs. One another factor are the incentives for construction industry by current govt which basically told people to spend all their money in construction and we will not ask where you got it from.

 

[Cookie Monster]

Inshallah, if the current track remains, sometime after the next election it is possible. The current government has to remains steadfast, there will be a lot of pressure on them to burn some reserves and relax policies in order to win public support, they should not make the same mistakes the previous govt did. The key is to have a sustainable and well managed increase, after that much better targets can be set.

I really hope that they don't start pleasing public at the expense of economy. Instead they should try to win public over by educating them(through TV/Media) of why such austerity measures are being taken...and the initial few years are no doubt going to be tough(this mess has been decades in the making) but just power through and keep focusing on improving the economy.

 

[The Accountant]

If that’s the case, then I agree. However I’m not aware at this time what the breakdown is of which imports have been reduced. I assumed that it was largely just the effect of low prices and low demand.

No its not my company use to import atleast 10% fabric from China from mid 2019 we are not importing anything as its not feasible now.

 

[The Accountant]

At this point, any major economy except maybe China, posting a surplus is never a good sign. Unless the export grew in double digit and the import is at a state before Feb 2020. I've seen many in here jumping up and down seeing India posting a surplus after 10-20 years, but didn't realize it's the worst economic hit in 70 years mainly due to demand glut in Jewelry and oil. As soon as it's reversed the deficit went positive.

You are absolutely wrong. Pakistan's economy was opened in August and now back to normal. Furthermore, this decrease in import is consistent with the pre-corona phase.

 

[The Accountant]

kindly read the article these all are temporary measures

Which article? As per OP this is going to improve further.

 

[Jungibaaz]

No its not my company use to import atleast 10% fabric from China from mid 2019 we are not importing anything as its not feasible now.

What’s the cause? Is the price too uncompetitive? Also, up till covid, I knew the breakdown of import reduction, it wasn’t much to celebrate, let’s see if this time is different, we’ll have some indication soon enough.

 

[PakAlp]

I don't want to sound pessimistic but its small surplus.

We can only be comfortable when our foreign reserves cross minimum of US$ 30 Billion. I hope that happens by 2023. Prior to next election.


Lot of hope from CPEC phase-2. Don't know when would the industries start production.

At the moment our forex reserves are comparable to Kenya and Afghanistan, US$30 Billion should take us to Egypt and Bangladesh level, thats where our minimum level should be.

 

[The Accountant]

What’s the cause? Is the price too uncompetitive? Also, up till covid, I knew the breakdown of import reduction, it wasn’t much to celebrate, let’s see if this time is different, we’ll have some indication soon enough.

Yup the fabric is now cheaper from local manufacturers ...

Van u please share the breakdown of import rediction? Import was reducing prior to covid as well

 

[Jazzbot]

I know its still too early to celebrate and we have a long hard ride to glory, but my inner patriot wants to start celebrating. Halal hugs to PTI supporters and middle finger to Nooni, peepee, fazlu supporters.

 

[CrazyZ]

Yup the fabric is now cheaper from local manufacturers ...

Van u please share the breakdown of import rediction? Import was reducing prior to covid as well

PKR devaluation was key here. It sends the signal to domestic business to import less and export more. It's a balancing act since it will lead to inflation in the short term. Pakistan waited far too long to devalue PKR. PML preferred to burn through the forex so economic consequences would be on next government. Sad.

 

[Samlee]

Where are the worshippers of papa Nawaj Chayreef??? @volatile @Jungibaaz @Tameem

They Are Trying To Give Izzat To Vote

 

[alibaz]

If that’s the case, then I agree. However I’m not aware at this time what the breakdown is of which imports have been reduced. I assumed that it was largely just the effect of low prices and low demand.

One thing is very clear that many imported items like jams, biscuits, dairy products, toiletries etc. are missing in superstores after getting out of reach due to heavy import duties and replaced with local items.

 

[volatile]

Remittance Boom Is Turning Into a Bust for Asia Emerging Markets

Migrant workers from Asia’s developing countries have managed to send home record amounts of money in recent months, defying pandemic expectations and propping up home economies at a critical time.

t.co

Which article? As per OP this is going to improve further.

 

[Hakikat ve Hikmet]

Looks like money laundering is being checked bit by bit! A long way to go though....

According to the Italian Ambassador to Pak, 80% of Pak's economy is undocumented/unregulated/untaxed...