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News18
10 hours ago
- Business
- News18
Pakistan records annual current account surplus of USD 2.1bn: Official data
Islamabad, Jul 19 (PTI) Pakistan recorded a current account surplus of USD 2.1 billion during the current fiscal year ending June 30, according to official data. Prime Minister Shehbaz Sharif hailed the development as a sign of an improving economy. The country faced a perennial issue of balance of payment and periodically rushed to the International Monetary Fund and other financial institutions to get monetary support. The latest data of the State Bank of Pakistan (SBP) on Friday showed the current account surplus was recorded at USD 2.1 billion, compared to a deficit of USD 2.1 billion during the previous fiscal year. It was apparently achieved following a strict policy to discourage unnecessary imports of luxury items, which were a drain on the current account. Other factors included encouraging remittances by expats and promoting exports of traditional and IT-related items. Adviser to the Finance Minister Khurram Schehzad took to X to announce that the surplus was the highest in 22 years. '[The] country's current account for June 2025 closes in a USD 328m surplus, taking the full-year surplus to over USD 2.1bn," he wrote. Schehzad added that remittances surged by 27 per cent year-on-year to reach a 'historic" USD 38 billion. He said that in the current fiscal year, textile exports increased by 7.4 per cent year-on-year to USD 17.9 billion, while IT (information technology) and IT-enabled services exports climbed to USD 4.6 billion — a year-on-year increase of 44 per cent. 'Last, but not the least, Pakistan Equities Market (KSE-100) crossed 140,000 points, making a historic mark in its history, with market value crossing Rs 16.8 trillion (close to USD 60bn)," he wrote. Prime Minister Sharif expressed gratitude for the current account surplus, calling it 'very welcome". Foreign exchange reserves have exceeded USD 19 billion due to government measures," he was quoted as saying in a statement from his office. 'The main reason for the stability in current account surplus is a significant increase in remittances and exports," he added. 'Improving financial and economic indicators show that the country's economy is on the path of stability." Sharif said the government is taking priority steps to provide a business and investment-friendly environment in the country. Despite the positive development, Pakistan still needs to do a lot, as it is in the middle of an IMF programme of USD 7 billion. The 39-month Extended Fund Facility binds it to carry out several reforms, including ending subsidies and privatising several loss-making entities. PTI SH NSA NSA view comments First Published: July 19, 2025, 10:15 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
The Hindu
13 hours ago
- Business
- The Hindu
Pakistan records annual current account surplus of $2.1bn: Official data
Pakistan recorded a current account surplus of $2.1 billion during the current fiscal year ending June 30, 2025, according to official data. Prime Minister Shehbaz Sharif hailed the development as a sign of an improving economy. The country faced a perennial issue of balance of payment and periodically rushed to the International Monetary Fund (IMF) and other financial institutions to get monetary support. Pakistan claims terror network 'dismantled', denies LeT link to Pahalgam attack The latest data of the State Bank of Pakistan (SBP) on Friday (July 18, 2025) showed the current account surplus was recorded at $2.1 billion, compared to a deficit of $2.1 billion during the previous fiscal year. It was apparently achieved following a strict policy to discourage unnecessary imports of luxury items, which were a drain on the current account. Other factors included encouraging remittances by expats and promoting exports of traditional and IT-related items. Advisor to the Finance Minister Khurram Schehzad took to X to announce that the surplus was the highest in 22 years. '[The] country's current account for June 2025 closes in a $328m surplus, taking the full-year surplus to more than 2.1bn,' he wrote. Mr. Schehzad added that remittances surged by 27% year-over-year to reach a 'historic' $38 billion. The Resistance Front was floated to deflect international sanctions against Pakistan: security officials He said that in the current fiscal year, textile exports increased by 7.4% year-over-year to $17.9 billion, while IT (information technology) and IT-enabled services exports climbed to $4.6 billion — a year-over-year increase of 44%. 'Last, but not the least, Pakistan Equities Market (KSE-100) crossed 1,40,000 points, making a historic mark in its history, with market value crossing ₹16.8 trillion (close to $60bn),' he wrote. Prime Minister Sharif expressed gratitude for the current account surplus, calling it 'very welcome.' Foreign exchange reserves have exceeded $19 billion due to government measures,' he was quoted as saying in a statement from his office. 'The main reason for the stability in current account surplus is a significant increase in remittances and exports,' he added. Can India push Pakistan into FATF's 'Grey list'? 'Improving financial and economic indicators show that the country's economy is on the path of stability.' Mr. Sharif said the government is taking priority steps to provide a business and investment-friendly environment in the country. Despite the positive development, Pakistan still needs to do a lot, as it is in the middle of an IMF programme of $7 billion. The 39-month Extended Fund Facility binds it to carry out several reforms, including ending subsidies and privatising several loss-making entities.
Reuters
a day ago
- Business
- Reuters
IMF approves $1 billion augmentation in Ecuador program
July 18 (Reuters) - The International Monetary Fund said on Friday it has completed its second review of Ecuador's Extended Fund Facility and approved an augmentation of the program by about $1 billion. The approval will allow Ecuador to immediately access around $600 million, the IMF said. The approved augmentation for Ecuador increases access under the program to $5 billion from $4 billion, the IMF said. "Despite challenging circumstances, Ecuadorian authorities have successfully mobilized non-oil revenues, strengthened fiscal and external buffers, and cleared domestic arrears while protecting vulnerable groups," said IMF Deputy Managing Director Nigel Clarke.
Business Recorder
3 days ago
- Business
- Business Recorder
Economy rescued
EDITORIAL: Prime Minister Shehbaz Sharif, yet again, credited his government with undertaking effective measures to achieve economic stabilization. This claim is fully supported, given that he single-handedly restored the International Monetary Fund (IMF) confidence in his administration's pledge to implement the reform agenda agreed under the 2019 Extended Fund Facility (EFF) programme, reflected by the nine-month 3 billion-dollar Standby Arrangement (SBA) with the Fund in June 2023, that removed all obstacles towards securing the current 36-month-long EFF agreed last year. Attaining stabilisation was of paramount importance, given that the country was facing the looming threat of default attributable to the boom-bust cycle that has periodically characterized Pakistan's economy with imports rising to fuel growth that in turn widens the current account deficit, thereby requiring IMF and donor (bilaterals and multilaterals) injections. It is therefore a singular achievement of his government that from a low of under 3 billion-dollar foreign exchange reserves in February 2023 the country has achieved 14.5 billion dollars as of 4 July 2025. What, however, remains a source of concern is that in spite of a massive rise in remittance inflows (up to 38 billion dollars last fiscal year) the country owes 16 billion-dollar rollovers to friendly countries. It is important to note that Prime Minister also referred to low inflation (from 38 percent Sensitive Price Index to the current 3,81 percent in 2024-25) and a 10 percent decline in the discount rate (from 21 percent in June 2024 to 11 percent in June this year) as positive developments that would impact positively on the general public. Sadly, these two positive developments have yet to filter down to the general public by raising their quality of life or indirectly through raising large-scale manufacturing (LSM) output, which would have a beneficial impact on employment opportunities given that LSM growth was negative 1.52 percent (July-April 2025) against 0.26 percent in the comparable period the year before. The reason for this is the fact that Pakistan's poverty level is on the rise – to 44.2 percent as per the World Bank with unemployment at a high of 22 percent. It is necessary to determine why the feel-good factor is not being widely felt in spite of these two positive developments. Low inflation has not impacted more positively on the general public because the private sector which employs around 93 percent of the country's total labour force has been unable to give a pay raise commensurate to inflation for the past five to six years. This, however, does not apply to the 7 percent who receive their salaries at the taxpayers' expense who have been given an annual raise higher than inflation. And in spite of the reduction in the discount rate it is double that of our regional competitors, which makes local industry uncompetitive. If one adds the input costs of electricity, gas and transport – items whose prices are administered under a rigid upfront IMF programme loan – the negativity in the LSM sector is explained. The Prime Minister further claimed major reforms in the Federal Board of Revenue (FBR); notably, digitization and faceless processing which he stated enabled an additional collection of 500-billion rupees. This too must be appreciated; however, success of the enforcement measures was in relation to existing taxes that are mostly in the indirect mode whose incidence on the poor is greater than on the rich. The Chairman FBR publicly noted the increase in collections in the sugar sector with his critics arguing that the recent rise in sugar prices is partly due to these enforcement measures that were passed onto the consumers and partly due to the flawed government decision to allow exports that led to domestic shortages. That the country is embarked on a reform agenda, which is backed by a reaffirmation by the IMF Resident Representative in Pakistan, is a fact. However, a lot more is required to ensure that the effects of these reforms filter down to the poor and for that the government must slash its current expenditure (to narrow the deficit and reduce reliance on debt) as well as increase the pace of structural reforms, including raising reliance on direct taxes, and improving management while reducing inefficiencies and corruption. Copyright Business Recorder, 2025
Express Tribune
3 days ago
- Business
- Express Tribune
Crisscross with Fund
Listen to article Days after the IMF praised Pakistan for 'strong performance' under the Extended Fund Facility (EFF) programme, a subsequent rejoinder from the Fund has put the loan-recipient country in an embarrassing situation. The Washington-based lender is unhappy with the import of sugar and that too by setting aside conditionalities that were part of the $7 billion bailout terms. It believes Islamabad has bypassed it by waiving taxes, and that is tantamount to a breach. This has landed the beleaguered government, which has not been able to fix the economic rot, in a catch-22 situation. And apparently, it is contemplating a damage control exercise which pertains to backing out of the imports entirely and withdrawing the tax waiver for the private sector. The government's decision to import 500,000 metric tonnes of sugar was a fallback on its bewildering nod to export the sweetener to the tune of 765,000 metric tonnes. Many see it as a deliberate move to appease the wheeler-dealers in the sugarcane mafia and that also encompasses many in the corridors of power. Though this has become an established norm in our torpedoed state of governance, this time around it was found to be on the wrong side of the divide as it violated a written agreement with the IMF not to grant preferential tax treatment or engage in commodity purchases. While the authorities tried to take a leave under the plea that the 'tax-free sugar import' was justified due to a food emergency, the lender has refused to entertain it. It is perplexing to note that the government went ahead with the export-import trial despite the finance ministry's assessment, which had forewarned of "detraction" by two breaches. The tax waiver, it is argued, was intended to reduce the imported sugar price by an estimated Rs82 per kilogram. It remains to be seen how this mistrust will be undone, and whether the next tranche will be a victim of this mismanagement. All that is desired is to win back the confidence of the Fund, and to ensure that the reforms and growth target set are achieved. That is the only way to free the fragile economy from a new programme in duress.
