KARACHI: Pakistan’s current account posted a surplus of over $1 billion in the first half (July-December) of the ongoing fiscal year (FY25), primarily driven by higher remittances and export growth.
According to data released by the State Bank of Pakistan (SBP) on Friday, the current account recorded a $1.2 billion surplus in July-December FY25, a significant turnaround from the $1.39 billion deficit in the same period of the previous fiscal year (FY24).
Analysts attributed this improvement to higher remittance inflows, a controlled trade deficit, and robust export earnings, which collectively contributed to the positive balance.
On a monthly basis, Pakistan registered a current account surplus of $582 million in December 2024, compared to $684 million in November 2024. Despite being lower than the previous month, the December surplus exceeded expectations, bringing the first-half FY25 surplus to $1.21 billion.
State Bank has also revised current account numbers of Jul, Aug, Sep, and Nov 2024 and the large part of the revision is made in services deficit. According to SBP, during the first quarter of this fiscal year current account posted a $402 million deficit, while a surplus of $1.612 billion was recorded in the second half of this fiscal year.
In addition, despite a positive current account and a breakeven capital account, the Balance of Payments (BoP) turned negative for the month due to loan repayments. However, the BoP remains in positive territory during the first half of FY25.
According to JS, BOP has turned negative for the second time in December during this fiscal year, last in July 2024. During this time SBP has managed to increase reserves by $2.3 billion to $11.7 billion, improving import cover from 2.0 to 2.8 months.
For FY25, the SBP has projected a current account balance within the lower end of the projected range of 0–1 percent of GDP. Analysts said that the SBP’s target for FY25 appears achievable, supported by a balanced trade deficit and stable remittance inflows as this equilibrium helps maintain a manageable current account.
Copyright Business Recorder, 2025
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