Current Account register surplus of $13mn in May’20
State Bank of Pakistan released the current account data for May’20. Current Account registered a surplus of $13mn in May’20. This was the second time in FY20 that Current Account turned into surplus after $72mn in Oct’19.
In the 11MFY20 period, Current Account Deficit declined by 74% from $12.5bn in 11MFY19. Current Account Deficit as a % of GDP on annualized basis has dropped to 1% for 11MFY20 as compared to 5.0% in 11MFY19.
The surplus in May’20 came majorly on account of 36% decline in Y/Y imports and more specifically fall in oil imports in the last quarter of FY20. Current Account turned into surplus despite the fact that exports and remittances also registered 45% Y/Y and 19% Y/Y decline in May’20.
Current Account surplus and $1bn from WB and ADB would strengthen the Foreign Exchange Reserves position for Pakistan and would also stabilize the currency which was seen depreciating since last week.