Premature alarm

LAST month’s $420m current account deficit reflects the pressure of debt payment and a rising import bill on Pakistan’s balance-of-payments position, amid drying up foreign loans and falling foreign private investment. This gap most likely marks a temporary reversal of the earlier trend of continuous surplus posted for five consecutive months — August to December — on account of a substantial boost in remittances from overseas Pakistanis. The remittances have recorded a surge of $5bn between July and January from a year ago. The January gap slashes the accumulated current account surplus from $1.2bn to $628m — still significant progress from the deficit of $1.8bn posted in the same period last year, spawning hopes that the current account surplus/ deficit will remain range-bound between +0.5pc and -0.5pc of GDP during FY25.