Pakistan’s current account (C/A) posted a deficit of $12 million in February 2025, showing a significant improvement from the $399 million deficit recorded in January 2025. However, it remained in the negative compared to a surplus of $71 million in the same month of the previous year, according to data released by the State Bank of Pakistan (SBP) on Monday.
Month-on-Month Recovery
On a month-on-month (MoM) basis, the current account saw a recovery from the revised deficit of $399 million in January 2025, indicating a positive shift despite the negative balance.
For the first eight months of the current fiscal year (8MFY25), Pakistan’s current account has posted a surplus of $691 million. This is a stark contrast to the deficit of $1.730 billion recorded during the same period last year, highlighting the country’s efforts to stabilize its economic position.
Breakdown of Key Figures
In February 2025, Pakistan’s total export of goods and services amounted to $3.302 billion, marking a 3% increase from the $3.208 billion reported in February 2024.
Imports during the same month reached $6.036 billion, an increase of nearly 17.64% compared to the previous year.
Meanwhile, workers’ remittances saw a notable rise, reaching $3.119 billion, a 38.62% increase compared to February 2024.
Factors Behind the Improvement
Several factors have contributed to the reduction in the current account deficit, including low economic growth, high inflation, and a rise in exports. A higher interest rate, which has gradually decreased in recent months, along with import restrictions, have also supported the government’s goal of reducing the current account deficit.
Cumulative Data for 8MFY25
For the first eight months of FY25, total exports of goods and services stood at $27.28 billion, while imports reached $46.03 billion, according to SBP data.
As Pakistan heavily depends on imports to fuel its economy, the current account balance remains a crucial indicator for the country. A widening deficit pressures the exchange rate and depletes foreign exchange reserves, while a surplus strengthens reserves and stabilizes the exchange rate.
