Pakistan’s current account improves but remains negative in February 2025

Pakistan’s current account (C/A) posted a deficit of $12 million in February 2025, against a surplus of $71 million recorded in the same month the previous year, data released on Monday by the State Bank of Pakistan (SBP) showed.

On month-on-month (MoM) basis, the C/A posted a recovery from a deficit of $399 million (revised) in January 2025.

Overall, the figure takes Pakistan’s current account to a surplus of $691 million in the first eight months of the current fiscal year (8MFY25), in stark contrast to a massive deficit of $1.730 billion in the same period of the previous fiscal year.

Breakdown

In February 2025, the country’s total export of goods and services amounted to $3.302 billion, up 3% as compared to $3.208 billion in the same month of the previous year.

Meanwhile, imports clocked in at $6.036 billion during February 2025, an increase of nearly 17.64% on a yearly basis, according to SBP data.

Workers’ remittances clocked in at $3.119 billion, an increase of over 38.62% as compared to the previous year.

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, which has declined in recent months, and some restrictions on imports have also aided the policymakers’ objective of a narrower current account deficit.

8MFY25

In 8MFY25, the country’s total export of goods and services amounted to $27.28 billion. Whereas, imports clocked in at $46.03 billion during the period, according to SBP data.

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, while the situation reverses vice versa.