Current account in $128m surplus

The current account posted a surplus in February, contrary to the preceding month, raising hopes that the government would achieve the current deficit target for fiscal year FY24. According to data released by the State Bank on Tuesday, the current account was $128 million in surplus last month, compared to a deficit of $303m in January and a deficit of $50m in Feb 2023. The State Bank, in its monetary policy announced on Monday, expressed the hope that the CAD would remain in the range of 0.5 to 1.5 per cent of GDP at the end of FY24. The current account surplus comes as a great relief for the government at a time when it is struggling to arrange money for debt servicing and asking for help from donor agencies. The imbalances on external account of the country hit the entire economy so hard that it crushed the growth rate in FY23 and the problem of debt servicing is still unresolved. Sources in the finance ministry believe that $25bn would be needed for debt servicing in FY25. This huge burden poses a persistent threat to the economy. The previous governments failed to come up with any remedy; instead they remained busy borrowing money to avoid a sovereign default.