Pakistan’s current account posts surplus of $491mn in April 2024

Pakistan’s current account posted a provisional surplus of $491 million in April 2024 compared to a revised surplus of $434 million in March 2024, revealed data released by the State Bank of Pakistan (SBP) on Friday.

Overall, during the ten months of the ongoing fiscal year, the current account balance stood at a deficit of $202 million, massively lower than $3.92 billion in the same period of the previous year.

“This surplus came higher than our expectations as the SBP reported much lower trade deficit than the Pakistan Bureau of Statistics (PBS) i.e. 72% of PBS, compared to 10MFY24 ratio of 90%,” said brokerage house Topline Securities in a note.

Low economic growth along with high inflation have helped curtail Pakistan’s current account deficit with an increase in exports also helping the cause. A high interest rate and some restrictions on imports have also aided the policymakers’ objective of a narrower current account deficit.

During April 2024, Pakistan’s exports of goods and services stood at $3.28 billion, while imports clocked in at $5.28 billion.

Meanwhile, remittances in April clocked in at $2.81 billion.

In 10MFY24, the country’s total export of goods and services amounted to over $32.1 billion. Whereas, imports clocked in at $51.7 billion during the period, according to SBP data.

Whereas, the country’s worker remittances clocked in at $23.85 billion, as increase of 4% as compared to same period last year.

The current account is a key figure for cash-strapped Pakistan which relies heavily on imports to run its economy. A widening deficit puts pressure on the exchange rate and drains official foreign exchange reserves.

Pakistan is currently engaged in talks with the International Monetary Fund (IMF) over a new longer and longer bailout with the lender as it looks to shore up its foreign exchange reserves, which currently stand at $14.62 billion.