Some good news
The best news is that the current account deficit (CAD) is down. Yes, the mother of all economic challenges has been the CAD which under the PML-N ballooned from $2.5 billion in 2013 to $19.9 billion. The really good news is that the CAD for June 2019 came in at $997 million against $1.9 billion in June 2018. What that means is that we were running a CAD of nearly $2 billion a month a year ago which has now come down to under $1 billion a month. For FY 2019, CAD has come down to $13.6 billion from $19.9 billion; a year-over-year improvement of 32 percent.
The other good news is that our non-oil CAD is near-zero. Technically, a lower CAD means lesser pressure on the rupee-dollar parity-but continued pressure nevertheless. The other good news is that imports have come down from $5 billion a month last year to $4 billion a month; a decline of 20 percent. Year-over-year, imports are down 23 percent which is the steepest decline in ten years. Yes, remittances from Pakistani workers have jumped from $19.9 billion last year to $21.8 billion-a 10 percent improvement.
The not-so-good news is that exports ? despite a 30 percent depreciation ? are not picking up steam. Year-over-year exports are actually down from $24.7 billion last year to $24.2 billion this year, a drop of 2 percent. The other bad news is that foreign direct investment (FDI) has come down from $3.4 billion last year to $1.7 billion this year, a drop of 50 percent. The other not-so-good news is that our accumulated imports are down primarily because of a decline in the import of machinery (and transport).
The other good news is that British Airways (BA), the flag carrier airline of the UK, resumed flights to Pakistan after a 10-year suspension. BA is now ?scheduled to fly three times a week to Islamabad from London Heathrow? (BA had stopped flying to Pakistan after the Marriott Hotel bombing in 2008). With effect from June 14, the International Civil Service Commission of the UN restored Pakistan?s status as ?family station?. This is the equivalent of an ?international vote of confidence? for Pakistan?s improved security scenario (the UN had downgraded Pakistan?s status after the Marriott Hotel bombing in 2008).
This week there was truckloads of good news from the tribal districts of Khyber Pakthunkhwa where polling for election on sixteen seats ended. The Free and Fair Election Network (Fafen) declared the ?historic elections as peaceful and free from any major controversy over the quality of the electoral process.? Imagine; peaceful elections in the tribal districts that the Voice of America labelled as the ?former epicentre of terror?. Yes, the US has been trying to do something similar in Afghanistan; eighteen years and a trillion dollars down the drain ? and two-thirds of Afghanistan is still controlled by the Taliban.
The good news on terror-related deaths is that Pakistan is now recording its lowest numbers in a decade. The US State Department has designated the Balochistan Liberation Army (BLA) as a ?global terrorist organization?.
Red alert: The economy is slowing down at a pace much faster than I had expected only a few weeks ago. This surely is stagflation ? persistent ?high inflation combined with high unemployment?. This could, if it continues, lead to urban strife. Urgent measures must be taken to reverse the trend ? and the expansion of social safety nets.
The writer is a columnist based in Islamabad.