Pakistan posts highest ever current account surplus in March

Pakistan’s current account posted a surplus of $1.195 billion in March, the highest in the country’s history. The second-highest surplus was recorded in August 2012 at $981 million.

March’s surplus was up 229% compared with the $363 million surplus recorded in the same month last year.

In the first nine months of the fiscal year, the current account posted a surplus of $1.859 billion, up 12.5% from $1.652 billion in the corresponding period last year.

Analysts attributed the surplus to higher remittances, which surged by $1.1 billion in March to $4 billion, while exports recorded an additional flow of $500 million during the month.

According to the central bank’s monetary policy statement last month, import volumes have been rising consistently in line with the pickup in economic activity. The uptick in some global commodity prices further pushed up import payments in January. However, robust workers’ remittances, along with relatively moderate growth in exports, played a key role in financing elevated imports.

The central bank assessed that these developments are broadly in line with its expectations and reaffirmed its FY25 current account balance projection of a surplus and a deficit of 0.5% of GDP.

Nonetheless, net financial inflows remained weak, mainly due to a shortfall in planned official inflows. The majority of debt repayments for the year have already been made. With lower debt repayments and the expected realization of planned official inflows in the remaining months of FY25, the State Bank of Pakistan’s foreign exchange reserves are likely to exceed $13 billion by June 2025.

Asian Development Bank (ADB) in its recent outlook projected Pakistan’s FY25 current account surplus to be 1.0% of GDP.