Surplus After Five Years | Editorial

Slowly, but surely, the indicators for Pakistan’s economy have started looking positive. After a gap of more than five years, the State Bank of Pakistan has posted a quarterly current account surplus of $792m during the first quarter of FY21 against a deficit of $1.492 billion recorded in the same period last fiscal year. It is evident that the government has made this a priority for the last few years and it should be praised for pulling it off.

This is welcome news—the government’s reforms finally seem to be showing some results after an extended period of pain. Yet while this is certainly an achievement that the government can and should tout, it is doubtful as to what extent the positives of these developments will trickle down to the average person and how much change the lower-income masses will see. The fact is that this surplus has been achieved by the government’s dedication to increasing remittances. There was a 31 percent increase in remittances during the quarter under review due to the government’s crackdown on illegal channels of remitting, as well as a host of pandemic-related factors including suspension of international travelling and workers sending money to their families more than usual during the pandemic.

While exports have increased, so have the restrictions on imports—with total imports declining by 8.1 percent. There is no data to show that these imports have decreased because of use of local products or because of higher prices which might have stifled production or sale. The fact of the matter is no matter what the official numbers displayed on the SBP’s reports on the surplus are, the average people judge the economy by what is in front of them—in terms of the prices of the essential products they use. This government’s reforms have started pulling in good results but it can be argued they have been done so at the cost of the average masses. If the government wants to keep its voter base, it needs to start translating the surplus it has made into lowering prices and relief packages for the ordinary people.


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