SUMMARY of the Article “Cautious hope?” by Editorial, Dawn [Published on December 20th, 2023]

The reported $9 million current account ‘surplus’ in November is attributed to government and State Bank actions, including import restrictions and tight monetary and fiscal policies, shrinking the trade deficit and reducing the current account deficit for the first five months of the fiscal year to $1.16 billion, down by almost 64% from $3.264 billion a year ago. The government anticipates maintaining the deficit in the range of $4 billion to $4.5 billion for the entire fiscal year, with the State Bank even suggesting the possibility of closing the deficit at 1% to 1.5% of GDP, relieving pressure on foreign exchange reserves amid drying capital inflows. However, the current economic situation is characterized by import compression and demand suppression, leading to a stagnant or zero growth rate. Despite last month’s small uptick in imports due to easing IMF restrictions, and a more than 10% decline in remittances over the last five months due to economic and political uncertainty, external stability achieved through import demand compression remains fragile. Short to medium-term economic recovery depends on » Read More…