Islamabad, Jan 17: Pakistan recorded a monthly current account surplus of $582 million in December 2024, marking the fifth consecutive month of surplus, primarily driven by higher remittances and an improved trade balance. This continued streak of surpluses has resulted in the country achieving a cumulative current account surplus of $1.21 billion in the first half of FY25, a significant turnaround from the $1.397 billion deficit recorded during the same period last year.
According to recent adjustments, the earlier reported 5MFY25 surplus of $944 million has been revised upward, reflecting an additional $316 million in surplus adjustments. This robust performance highlights a steady improvement in Pakistan’s external account, with December alone contributing $582 million to the overall figure.
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Worker remittances have been a key driver of this positive shift. December 2024 saw remittances surge to $3.079 billion, reflecting a remarkable 29% year-on-year (YoY) increase. For the first half of FY25, remittances totaled $17.84 billion, up by an impressive 33% compared to the same period last year. This increase underscores the pivotal role of overseas Pakistanis in bolstering the nation’s foreign reserves.
In terms of trade, Pakistan’s total exports of goods reached $16.2 billion in 1HFY25. Although exports showed resilience, the country’s imports during the same period stood at $27.7 billion, creating a significant trade gap. However, the rising inflow of remittances and effective policy measures have cushioned the impact of the trade deficit, steering the current account into surplus territory.
Pakistan’s economic performance in the first half of FY25 demonstrates a commendable recovery trajectory. Strategic initiatives to enhance export competitiveness, coupled with policies to attract remittances through formal channels, have played a crucial role in stabilizing the economy. While challenges remain, the sustained current account surplus reflects a positive outlook for the country’s financial health.
Looking ahead, continued efforts to optimize the trade balance, expand export volumes, and maintain robust remittance inflows will be essential for sustaining this momentum in the months to come.
