Pakistan posts record $1.2b current account surplus on surging remittances

Pakistan achieved a historic milestone as its current account surplus reached $1.2 billion in March, marking the highest figure since comparable data became available, according to central bank data released yesterday (17 April).

The March surplus represents a dramatic 229% increase compared to the same period last year, reports The News. 

However, the country experienced a $97 million current account deficit in the previous month.

For the first nine months of fiscal year 2025, Pakistan accumulated a $1.9 billion current account surplus, reversing last year's $1.7 billion deficit during the same period.

Remittances have emerged as the backbone of this economic turnaround, hitting an unprecedented $4.1 billion in March. 

This seasonal boost likely stems from pre-Eid inflows and improved usage of formal banking channels amid tighter regulations. The growing number of Pakistani citizens working abroad has also contributed significantly to the rise. 

The State Bank of Pakistan now projects total remittances for FY25 to reach approximately $38 billion, up from $30.25 billion last year.

Pakistan's Prime Minister Shehbaz Sharif expressed satisfaction with the record surplus, describing it as "a reflection of a stabilising economy" and attributing the improvement to "record remittances, increasing exports and the tireless efforts of the government's economic team."

However, analysts caution that maintaining this trend may prove challenging. 

"While the March surplus is encouraging, sustaining this trend may be challenging in the coming months as remittance flows normalise post-Eid and import demand potentially picks up with gradual economic recovery," said Saad Hanif, head of research at Ismail Iqbal Securities.

Despite the record current account performance, foreign exchange reserves in Pakistan saw no benefit due to a substantial $1.7 billion financial account outflow, primarily from banking and debt-related pressures.

In other economic developments, Pakistan's textile exports rebounded in March with a 9.97% year-on-year increase to $1.43 billion, while food exports declined 16.7% to $576.2 million. 

On the import side, petroleum group imports fell 18% to $1.23 billion in March, though transport imports surged 65% to $214.3 million.

Meanwhile, Pakistan's top commercial banks have agreed to a Rs1.275 trillion ($4.6 billion) rescue plan for the struggling power sector to address the mounting circular debt crisis.