Pakistan’s Current Account Reaches Historic Surplus in March 2025

According to data from the State Bank of Pakistan (SBP), Pakistan’s current account achieved an unprecedented monthly surplus of $1.2 billion in March 2025. This surge was primarily driven by record-breaking inflows of remittances from overseas workers.

Surplus Growth

The recorded surplus demonstrates a 229% surge compared to March 2024, during which the current account had a $363 million surplus. Furthermore, the figures for March 2025 represent a substantial improvement when compared to the $97 million deficit recorded in February 2025, demonstrating a notable turnaround in the country’s external economic situation.

Cumulative Surplus

The SBP reported that the cumulative current account surplus for the first nine months (July-March) of the fiscal year 2025 reached $1.859 billion. This is a stark contrast to the $1.652 billion deficit recorded during the corresponding period in the previous fiscal year (FY24).

Record Remittances

Analysts have pointed out that the surplus in March was largely attributable to record remittance inflows, which totaled $4.1 billion, the highest amount ever received in a single month. These inflows were critical in offsetting outflows related to trade and bolstering the overall external account position.

Analysts’ Perspectives

Analysts commented that this development is highly promising for Pakistan’s economy. They added that consistent improvement in the current account will ease pressure on the rupee, stabilize the balance of payments, and facilitate the accumulation of foreign exchange reserves.

They shared the central bank’s view, noting that the surplus offers the economy a much-needed respite amidst global economic uncertainties. They stated that with stable remittances and relatively stable oil import costs, this surplus could decrease the need for external borrowing, while also boosting the nation’s foreign exchange reserves.

SBP Governor Jameel Ahmed has already projected that the country’s foreign exchange reserves will be strengthened by higher remittance inflows. The SBP Governor stated that reserves held by the SBP are anticipated to reach $14 billion by the end of June 2025, exceeding earlier projections of $13 billion.

Trade Deficit

A detailed assessment reveals that Pakistan’s goods trade deficit increased by 15%, reaching $18.73 billion in the first nine months of the current fiscal year (FY25), versus $16.47 billion in the equivalent period of the prior fiscal year.

The widening deficit was fueled by an increase in imports, which rose from $39 billion to $43.39 billion. Meanwhile, exports experienced moderate growth, increasing from $22.89 billion to $24.66 billion, indicating a modest improvement in export performance amidst stronger domestic demand.

Services Sector Deficit

In the services sector, Pakistan had a deficit of $2.32 billion, with exports totaling $6.2 billion and imports amounting to $8.5 billion during the analyzed period.

Financial Crisis and IMF Program

Over the past two years, Pakistan has faced a prolonged financial crisis, necessitating significant foreign inflows to meet external debt commitments. As part of its stabilization measures, the country engaged in a $7 billion Extended Fund Facility (EFF) program with the International Monetary Fund (IMF) to strengthen its foreign exchange reserves and restore market confidence.

The country’s external sector is displaying encouraging signs of recovery, aided by supportive policy actions and strengthening macroeconomic fundamentals, including record remittances and reduced import pressures.