Pakistan current account posts $75mn surplus in August

Pakistan’s current account has posted a surplus in August – for the first time since April this year – primarily because of higher remittances and improved exports, official data issued on Wednesday showed.

Pakistan’s current account has posted a $75 million surplus in August, compared to a deficit of $152 million in August last year. Cumulatively in July-August, current account deficit (CAD) came in at $171 million compared to $893 million in the same period last year.

This improvement is attributed to a reduction in the trade deficit and an increase in remittances. Exports of goods increased from $4,536 million last year to $4,862 million in August, leading to a trade deficit in goods of $4,672 million, compared to $3,840 million in August 2023.

The balance on trade in services remained relatively stable, with a slight improvement from a deficit of $481 million last year to $471 million this August.

The primary income deficit widened from $964 million a year ago to $1,285 million this August, mainly due to higher payments on foreign investments.

Secondary income, which includes remittances, saw a substantial increase from $4,392 million last August to $6,257 million this year. Workers’ remittances alone increased from $4,124 million to $5,938 million.

The capital account balance showed a slight improvement, moving to $43 million in August compared to $20 million last year.

The financial account recorded a net outflow of $431 million in August, compared to a net outflow of $3,278 million in August 2023. This was driven by a reduction in other investments and portfolio investments.