While the global recession depressed the demand for Pakistan's exports, continued slowdown in the domestic economy resulted in decline in imports. Exports declined by 0.8 per cent and imports by 3.7 per cent in 2001-02. Both exports and imports experienced a turnaround in the fourth quarter of the year, recording increases of 4 per cent and 11 per cent, respectively. The upturn in imports, particularly those of raw materials, intermediate goods, and machinery, provides signs of a turnaround in the economy.
The improvement in the current account of the balance of payments was broad-based, as all the three components of the current account showed significant improvements. The trade balance, though still negative, improved sharply in 2001-02 due to a larger decline in imports than in exports and faster realization of export bills prompted by the sustained appreciation of the rupee. There was a substantial reduction of $515 million (or 18 per cent) in the services account largely due to receipts from the USA against logistic support provided for war in Afghanistan and smaller interest payments resulting from falling stock of foreign private loans and FE45 deposits.
The largest improvement was seen in current transfers, the third component of the current account, as net transfers increased to $5.3 billion in the first 11 months of the year compared with $4.2 billion in the corresponding period of 2000-01. Sharp increases of 112 per cent and 76 per cent in remittances and official grants, respectively, contributed to improvement in current transfers.
Article courtesy of DAWN http://www.dawn.com/2002/08/31/index.htm
The improvement in the current account of the balance of payments was broad-based, as all the three components of the current account showed significant improvements. The trade balance, though still negative, improved sharply in 2001-02 due to a larger decline in imports than in exports and faster realization of export bills prompted by the sustained appreciation of the rupee. There was a substantial reduction of $515 million (or 18 per cent) in the services account largely due to receipts from the USA against logistic support provided for war in Afghanistan and smaller interest payments resulting from falling stock of foreign private loans and FE45 deposits.
The largest improvement was seen in current transfers, the third component of the current account, as net transfers increased to $5.3 billion in the first 11 months of the year compared with $4.2 billion in the corresponding period of 2000-01. Sharp increases of 112 per cent and 76 per cent in remittances and official grants, respectively, contributed to improvement in current transfers.
Article courtesy of DAWN http://www.dawn.com/2002/08/31/index.htm