2:12 AM
McGhori
KARACHI: Despite a steep fall in foreign inflows, the current account posted a surplus of $160 million in December but the performance during the first half of the current fiscal was not impressive when compared to the same period in the last fiscal.
The State Bank of Pakistan (SBP) on Tuesday reported that the current account was surplus in December by $160 million which was surprising as the current account was in deficit by $688 million in November.
Analysts maintain that the surprise surplus was due to higher inflows of remittances sent by the overseas Pakistanis and does not reflect an increase in exports.
However, this positive development on external front reduced the current account deficit to $2.154 billion during July-December from $2.314 billion in JulyNovember. The encouraging development on the external front took place despite poor foreign inflows during the same period.SBP reported that the foreign direct investment (FDI) fell by 37 per cent during the first half of the current fiscal.
This was the decline compared to the first half of the previous year. The previous year was hopeless for FDI in Pakistan as the volume of foreign inflow has been declining each year for the last four years.
SBP said the FDI fell to $531 million in the first half of this fiscal, much less than $840 million FDI inflows during the corresponding period of previous year.
The details show that many sectors have lost attractions for the foreign investments; even the most attractive telecommunication witnessed a net outflow.
The report shows during the first half of the previous year foreign investment for telecommunication was $101 million while the same sector witnessed a net outflow of $132.5 million in the first half of the current fiscal.
`The shift in focus is visible in the list of sectors attracting foreign investments. The onlyattraction still alive is the oil and gas exploration which received highest amount $332 million during this period compared to $267 million in the six months of previous year.
The financial sector also witnessed a massive decline of 70 per cent in the FDI.
During the said period the sector received just $44 million while it had received $147 million in the same period of last fiscal,` the report stated.
Economist and analysts predict the current fiscal would see a much large current account deficit and a big cut in foreign direct inflows.
The prediction is being made in the wake of higher outflows particularly due to $1.1 billion payment to IMF and no hope to receive cheaper money from international donors.
The SBP reported that portfolio investment also saw a net outflow of $143 million while the inflow was positive with $232 million during the corresponding period of last fiscal.
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