Pakistan's current account deficit narrows to $12 million in February

The current account deficit in Pakistan for February 2025 contracted to $12 million, down from January's deficit of $399 million, primarily due to higher remittances.

According to data released by the State Bank of Pakistan (SBP) on Monday, the current account recorded a deficit of $12 million in February 2025, compared to a surplus of $71 million in February 2024.

For the first eight months of the current fiscal year, the current account showed a surplus of $691 million, a significant improvement from the deficit of $1.73 billion during the same period last year, as per SBP data. Out of the eight months, five months recorded deficits, while three months showed surpluses.

Initially, January's data showed a current account deficit of $420 million. However, following adjustments in February, the deficit figure for January was revised to $399 million.

The improvement in workers' remittances has been the key driver behind the positive changes in current account trends. During the first eight months of the current fiscal year, remittances reached $23.969 billion, compared to $18.084 billion in the same period of the previous fiscal year.

On average, monthly remittances in the current fiscal year amounted to $2.996 billion, up from $2.260 billion in the preceding year.

The government anticipates that remittances for the current fiscal year will range between $35 billion and $36 billion, surpassing the previous record of $31.278 billion achieved in the fiscal year ending June 30, 2022.

In its most recent monetary policy statement, the State Bank highlighted that robust remittances and export growth have partly offset the rise in imports. The central bank expects the current account to remain in surplus, with a deficit amounting to only 0.5% of GDP.

Imports for the first eight months rose by $3.915 billion, reaching $38.325 billion, while exports increased by $1.463 billion, totaling $21.82 billion, according to SBP data.