Remittances from abroad, foreign direct instruments and IT exports have all done better in July when compared year-on-year, thus making for a good start to the fiscal year. It is worth noting that these are three of the areas where the government is particularly reliant in its plan for the country’s economic growth. The improvement in remittances meant that the current account deficit was only $182 million, compared to $741 million in July 2023. The deficit was $313 million in June, the last month of the previous financial year. Though not counted as export proceeds, remittances are actually the proceeds of the export of manpower. The government’s strategy for job creation includes an increase in the number of expatriate workers.
FDI is also something that the present government lays a great emphasis on, and has declared that it no longer seeks aid as much as it does investment. The activities of the Special Initiatives Facilitation Council show that this government seeks FDI as a solution to the foreign exchange woes of the country. Aid has meant that Pakistan increasingly finds it difficult to service its debt. FDI is seen as a source of that foreign exchange, apart from being the capital needed for the country to service its debts. In July, according to the State Bank of Pakistan, $136.3 million came to the country as FDI, while the inflow a year before had been $83.2 million. Portfolio investment was Rs 23.6 million, as opposed to $15\6.3 million the year before. Much of the inflow was to finance the China-Pakistan Economic Corridor. Another positive development was the fact that Pakistan’s IT exports went up year-on-year, reaching $256 million, though there was a decline from June’s exports. The government has also placed its reliance on the IT sector, hoping that exports will reach $25 billion in a few years.
Only one year has begun, of what will be many. It is always good to have a good start, so that one is in the happy position of building upon success rather than having to make up for failure. It will be important to ensure that the coming year be a good one, as it will be much better to build on successes during it, than to have to try and recoup failures.
