Islamabad, Feb 18: In January 2025, Pakistan’s current account balance recorded a deficit of $420 million, marking the first negative turn in four months, as revealed by the State Bank of Pakistan (SBP). Prior to this, the country had enjoyed a surplus in its current account for three consecutive months, from October to December 2024.
In December 2024, the current account had a surplus of $474 million, contrasting with the deficit of $404 million observed in the same month of the previous fiscal year, January 2024. The current account’s decline this month was primarily driven by a 37% increase in the trade deficit, which surged to $2.5 billion. The Pakistan Bureau of Statistics (PBS) recorded a trade deficit of $2.3 billion for January 2025.
Despite the deficit in January, the overall current account balance showed a significant improvement during the first seven months of fiscal year 2025 (7MFY25). The cumulative current account balance for this period stood at a surplus of $682 million, a stark contrast to the $1.8 billion deficit reported in the same period of the previous year (7MFY24).
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This shift underscores the challenges Pakistan faces in balancing trade, but also highlights positive developments in the broader fiscal outlook. The persistent trade imbalance remains a concern, yet the overall improvement in the current account over the last year signals potential stabilization for Pakistan’s external accounts in the coming months.
Pakistan’s economic outlook depends on how effectively the trade deficit can be managed while continuing to focus on foreign exchange reserves, exports, and imports. The coming months will be crucial in determining whether the country can maintain its current account surplus trajectory or if additional measures are required to address the increasing trade gap.
