Rise in remittances lead to Pakistan's historic $1.2 billion current account surplus
Pakistan recorded a historic $1.2
billion current account surplus in March—the highest on record since comparable
data began—thanks to a surge in remittances, according to data released by the
State Bank of Pakistan on April 17.
The March surplus marks a staggering
229% year-on-year increase and a sharp turnaround from the $97 million deficit
recorded just a month earlier. For the first nine months of FY25, Pakistan has
accumulated a $1.9 billion surplus, a significant shift from the $1.7 billion
deficit during the same period last year.
The key driver behind this positive
shift has been remittances, which hit an all-time monthly high of $4.1 billion
in March. The spike is attributed to pre-Eid seasonal inflows, increased use of
formal banking channels due to tighter regulations, and a growing number of
overseas Pakistanis. The central bank now expects total remittances to reach
around $38 billion for FY25, up from $30.25 billion last year.
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records current account surplus of $397 million in December 2023
Prime Minister Shehbaz Sharif hailed
the surplus as a sign of economic stabilization, crediting the rise in
remittances, growing exports, and the government's economic management.
However, experts urge caution.
"This performance is promising, but sustaining it may be difficult
post-Eid as remittances stabilize and import demand grows with economic
recovery," said Saad Hanif, head of research at Ismail Iqbal Securities.
Despite the strong current account
numbers, Pakistan's foreign exchange reserves did not benefit. A hefty $1.7
billion outflow from the financial account—largely due to banking sector and
debt-related pressures—offset the gains.
On the trade front, textile exports
showed recovery with a 9.97% year-on-year rise in March to $1.43 billion. In
contrast, food exports fell 16.7% to $576.2 million. Imports of petroleum
products dropped 18% to $1.23 billion, while transport-related imports surged
65% to $214.3 million.
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sees increase in financial inclusion
Separately, major Pakistani banks
have agreed to a Rs1.275 trillion ($4.6 billion) bailout package to help
resolve the country's growing circular debt crisis in the power sector.
Source: The Business Standard