KARACHI: Pakistan’s current account remained in surplus in April 2025, posting a modest $12 million surplus despite a higher import bill.
Analysts had anticipated a deficit for the month due to a wider goods trade gap; however, the surplus was supported by strong $3.1 billion inflows of home remittances. In April 2025, goods imports rose by 17 percent to $5.237 billion, up from $4.448 billion in March. Meanwhile, exports remained nearly flat at $2.6 billion.
The State Bank of Pakistan (SBP) on Friday reported that the country recorded a $12 million deficit in April 2025 compared to $315 million in April 2024, depicting a decline of 97 percent or 303 million on year-on-year (YoY) basis.
The surplus in April 2025 is also lower than March 2025, in which the country registered a record surplus of $1.2 billion. March surplus was largely supported by record-high remittance inflows of $4.1 billion, the highest ever in a single month.
However, cumulatively, Pakistan’s external account is performing well driven by a rise in home remittance inflows, with the current account recording a surplus of $1.9 billion in the first ten months (July-April)of this fiscal year as against $1.337 billion deficit in the same period of last fiscal year (FY24).
Analysts said overall surplus in current account is an encouraging development for the economy and will reduce the pressure on the external account.
According to the SBP, current account surplus and the SBP’s foreign exchange purchases partially cushioned the impact of large ongoing debt repayments on the SBP’s foreign exchange reserves.SBP Governor Jameel Ahmed is expecting that the country’s foreign exchange reserves are likely to reach the $14 billion mark by the end of June 2025.
The monetary policy committee of SBP has also observed that the moderation in import bill, mainly due to the reduction in global oil prices, along with the continued uptick in HVA-textile exports, also contributed to the current account surplus.
According to the SBP statistics, Pakistan’s goods trade deficit widened by 19 percent or $3.3 billion, reaching $21.343 billion during the first ten months of the current fiscal year, compared to $18 billion in the same period of last fiscal year.
The increase in the deficit was driven by a rise in imports. Imports grew from $43.5 billion to $48.62 billion, while exports reflected a moderate improvement in performance increasing from $25.5 billion to $27.276 billion.
On May 14, Pakistan has received $1.023 billion as tranche of IMF’s Extended Fund Facility (EFF) program of $7 billion to build the foreign exchange reserves. In addition, the IMF Executive Board had approved an arrangement under the Resilience and Sustainability Facility (RSF), with access of about $1.4 billion (SDR 1 billion) for Pakistan.
Analysts stated that these inflows will also contribute to improving the current account, which is projected to show a surplus of $2.5-3.0 billion, or 0.6-0.7 percent of GDP, by the end of this fiscal year.
Copyright Business Recorder, 2025
