Karachi, November 18, 2024 – Pakistan recorded a current account (CA) surplus of $349 million in October 2024, a notable improvement from a deficit of $287 million in the same month last year, according to data released by the State Bank of Pakistan (SBP).
This marks the third consecutive month of surplus, driven by robust remittance growth. “The surplus reflects a 7% month-on-month (MoM) and 24% year-on-year (YoY) increase in remittances,” noted Mohammed Sohail, CEO of Topline Securities.
The SBP also revised September’s surplus to $86 million, down from an earlier estimate of $119 million.
Fiscal Year-to-Date Improvement
In the first four months of FY25 (July-October), the current account surplus reached $218 million, a stark contrast to the $1.53 billion deficit recorded in the same period last year.
Export and Import Trends
In October 2024, Pakistan’s total exports of goods and services rose to $3.71 billion, a 12% increase from $3.33 billion in October 2023. Imports also grew, climbing 7% to $5.56 billion compared to $5.2 billion in the same period last year.
Worker remittances surged to $3.05 billion in October, a 24% YoY increase, underscoring the vital role of overseas Pakistanis in stabilizing the country’s external account.
Restrictive Policies Aid Balance
The narrowing of Pakistan’s current account deficit can be attributed to a combination of low economic growth, high inflation, and policy measures such as elevated interest rates and import restrictions. These factors have curtailed demand for imports while supporting export growth.
4MFY25 Performance
Between July and October 2024, Pakistan’s total exports of goods and services reached $13.11 billion, while imports amounted to $22.43 billion. Worker remittances during the period totaled $11.85 billion, a substantial 35% increase from $8.79 billion in the same period last year.
Key Economic Implications
For an import-reliant economy like Pakistan, a widening current account deficit typically exerts downward pressure on the currency and depletes foreign exchange reserves. Conversely, the current account surplus provides some relief for policymakers, offering stability to reserves and the exchange rate.
While the recent surplus is a positive development, sustaining it amid global uncertainties and domestic challenges remains critical for long-term economic stability.
