Karachi:
The current account surplus in Pakistan, driven by remittances, has been in a decline trajectory, as in April 2025, fell abruptly to $ 12 million, a significant decrease of $ 315 million in April 2024 and $ 1.2 billion in March 2025.
In April 2025, the Pakistan current account surplus decreased abruptly, mainly due to the increase in imports and a 22% decrease from month to month in remittances, said Ali Najib, Sales Head of Sales of Insight Securities.
However, despite the monthly slowdown, the cumulative surplus for the first 10 months of fiscal year 2025 (July-April) reached $ 1.9 billion, an important change of the deficit of $ 1.34 billion registered during the same period of fiscal year 2014, reflecting the improved external strength and the force of remittances, according to the latest balance of the data of the payments released by the state bank of Pakistan (SBP).
“The last time Pakistan saw a current account surplus throughout the year was more than 14 years ago, which made this a remarkable development for a long country harassed by external imbalances,” Sana Tawfik wrote and Rao Aamir Ali Ali de Arif Habib Limited (AHL) Research in a report.
Remittances lead the way
The main driver behind the change is a strong increase in workers’ remittances, which grew 31% year -on -year (year -on -year) to $ 31.2 billion in 10mfy25. In April alone, remittances registered $ 3.2 billion, 13% year -on -year. The largest tickets come from Saudi Arabia ($ 728 million, 2%more), the EAU ($ 658 million, 21%more) and the United Kingdom ($ 535 million, 33%more).
Analysts see this as a crucial mattress against the increase in imports and investment -related outputs. “The increase in remittances has been fundamental not only to compensate for the commercial deficit, but in achieving a general surplus of current account,” AHL said in his report.
Looking towards the future, the brokerage expects the FY25 to close with a surplus of $ 1.6 billion, mainly due to the expected remittance tickets of the entire year of $ 37.4 billion, which represents a 24% growth of the year.
The commercial deficit expands
While the general external position has improved, the trade balance remains a structural concern. Pakistan goods imports increased by 12% year -on -year to $ 48.6 billion for 10mfy25. In April alone, imports increased 18% year -on -year and 6% from month to month (mom) to $ 5.2 billion, led by oil ($ 1.2 billion), machinery ($ 792 million) and chemicals ($ 790 million).
The strong volatility highlights the dependence of remittances and external entries, which raises risks to the sustained stability of the balance of payments, Najib said.
Exports of goods, although higher than $ 27.3 billion, fell by 1% in April 2025 compared to the same month last year and decreased 6% since March 2025. As a result, the commercial deficit of goods extended 19% yoy to $ 21.3 billion in the period of 10 months.
The services sector showed a modest improvement. Services exports increased 9% year -on -year to $ 6.9 billion in 10mfy25, backed by technology exports, which grew 21% year -on -year to $ 3.14 billion, representing 44% of total service exports. However, the general trade balance in goods and services recorded a combined deficit of $ 23.8 billion, compared to $ 20.4 billion in the same period last year.
The primary income account, which largely reflects interest payments and dividends on foreign debt and investment, recorded a deficit of $ 7.13 billion in 10mfy25, an interannual increase. In April, the deficit was $ 603 million, a little higher than in April 2024, but 8% less than in March.
On the other hand, the secondary income balance, which includes remittances, showed a robust increase of 30% Yoy to $ 32.8 billion, playing a fundamental role in the impulse of the current account.
Foreign direct investment (FDI), however, remained silenced and volatile. The net FDI for April was $ 141 million, compared to $ 26 million in March. Accumulatively, net FDI decreased by 3% year -on -year to $ 1.79 billion in 10mfy25. Ahl pointed out that while there has been some collection in recent months, FDA tickets remain concentrated and lack diversification between the sectors.
The financial account, which includes foreign investment and external loans, recorded a surplus of $ 1.6 billion in 10mfy25 compared to a deficit of $ 4.2 billion last year, indicating an improved capital flow environment.
The Chief of Research of Optimus Capital, Maaz Azam, said that in April 2025, the commercial deficit reported by the SBP was lower at $ 762 million to $ 2,626 million, compared to the figures published by the Pakistan Statistics Office (PBS).
According to Azam, this discrepancy comes from differences in export and import reports, and the SBP shows higher exports at $ 470 million to $ 2,611 million and lower imports at $ 292 million to $ 5,237 million, in relation to PBS data. This variance significantly influenced the result of the external account, which resulted in an almost flat current account balance, “contrary to market expectations for a slight deficit.”
