After a period of surpluses spanning five months, Pakistan’s current account posted a deficit of $420 million in January 2025, reflecting a 4% increase compared to the $404 million deficit recorded in the same month last year. According to data released by the State Bank of Pakistan (SBP) on Tuesday, this marks the first deficit since July 2024.
For December 2024, the current account surplus, initially reported at $582 million, was revised to $474 million in the latest data.
Despite the deficit in January, Pakistan’s current account remains in surplus by $682 million for the first seven months of the current fiscal year (7MFY25), a sharp contrast to the significant $1.801 billion deficit during the same period last year.
Key Figures
In January 2025, Pakistan’s total export of goods and services stood at $3.631 billion, an 8% increase from $3.362 billion in January 2024. Meanwhile, imports surged to $6.461 billion, marking a 15% year-on-year rise. Worker remittances for the month reached $3.002 billion, up by more than 25% compared to the previous year.
The narrowing deficit can be attributed to reduced economic growth and high inflation, which have restrained imports. Additionally, a boost in exports and policies such as higher interest rates (which have recently decreased) and import restrictions have also contributed to the improvement.
For the first seven months of the fiscal year, Pakistan’s total exports reached $23.92 billion, while imports totaled $39.99 billion. Worker remittances amounted to $20.85 billion, reflecting a nearly 32% increase from $15.83 billion in the same period last year.
The current account balance is crucial for Pakistan, which heavily depends on imports to support its economy. A widening deficit exerts pressure on the exchange rate and depletes foreign exchange reserves, while a surplus has the opposite effect, helping to stabilize the country’s economic situation.
