By Abdul Wajid Khan ISLAMABAD, Nov 03 (INP-Wealthpk): The country's economy has shown some positive indicators in its recovery as the Ministry of Finance has reported that the current account deficit declined by 24.4% to $1.1 billion in September 2021 on a month-on-month (MoM) basis from $1.4 billion in August 2021, thanks to a significant increase in exports and remittances. However, the ministry said the unprecedented increase in global commodity prices was putting pressure on prices as well as on the Pakistani rupee. "Exports of goods and services crossed the $3 billion mark due to strong economic recovery in Pakistan's main trading partners. The momentum in domestic economic dynamism and pro-growth policies will keep exports above the $3 billion mark in the months ahead. The economic expansion may go along with a current account deficit. However, measures are underway to curb the trade deficit at a manageable level to ensure the external sector’s stability," said the Economic Adviser's Wing of the Ministry of Finance in its Monthly Economic Update & Outlook for October. It is pertinent to mention here that the announcement of Saudi Arabia’s $4.2 billion support for Pakistan, has eased some pressure on the Pakistani rupee and it bounced back on Wednesday and gained Rs2.5 against the US dollar in the interbank market, which closed at Rs172.78. The report has said the unprecedented increase in global commodity prices is putting pressure on prices as well as on the rupee, and that revival of domestic economic activities has remained on track but the risk of inflationary pressure persists on account of both demand and supply conditions. Despite the risk of higher international commodity prices, exchange rate depreciation, and adjustments in administered prices, the government's pro-supply side policies, administrative and relief measures may neutralize the associated risks. The Economic Adviser's Wing outlook has highlighted that FBR is focused on sustaining its successful streak of surpassing tax collection targets during the first quarter of the current financial year. It is expected that the momentum of tax collection will continue and FBR will achieve the revenue target set for the current financial year. The report further adds that the economic recovery has accelerated since March 2021 and is expected to continue on account of strong growth in the agriculture and manufacturing sectors. The performance of the commodity-producing sector will accelerate activities in the services sector through multiplier effects. Furthermore, the government has lifted Covid-related restrictions due to a massive decline in cases and higher vaccination. All these developments will further stimulate the confidence of economic agents. In the real sector, the Economic Adviser's Wing report said a significant improvement in the production of important Kharif crops was reported in 2021. Production of sugarcane is estimated at 87.7 million tonnes (81.0 million tonnes last year), rice production at 8.8 million tonnes (8.4 million tonnes last year), while maize production at 9.0 million tonnes (last year 8.9 million tonnes). Cotton production is estimated at 8.5 million bales (7.1 million bales last year). The Large-Scale Manufacturing (LSM) sector's performance witnessed a broad-based year-on-year (YoY) growth of 12.74% in August 2021 on the back of improved business confidence and consumer demand. On an MoM basis, LSM accelerated by 2.09% as compared to -5.08% in July 2021. The overall growth of LSM during Jul-Aug of the current financial year clocked in at 7.26% reaching well above the pre-pandemic levels. In fiscal, monetary & external sectors, the report said that the fiscal deficit in Jul-Aug period of the current financial year was recorded at 0.9% of GDP (Rs462 billion). Expenditures under PSDP grew by 19% to Rs63 billion in Jul-Aug this year against Rs53 billion in the same period of last year. Broad Money (M2) witnessed an expansion of Rs89.7 billion in Jul-Sept this year against an expansion of Rs130.1 billion during the comparable period of last year. The global economic recovery is continuing, but the pace has slowed amid rising uncertainty due to the pandemic and growing international commodity prices. The World Economic Outlook has revised global growth projection down marginally for 2021 by 0.1% to 5.9% and kept the growth unchanged for 2022 at 4.9%. An upward trend was witnessed in global energy prices in September, jumping 10.8%. The non-energy prices fell by 1.1%, prices of agriculture commodities and fertilizers fell by 0.7% and 1.0%, respectively, the report added.