Pakistan has recorded a landmark current account surplus of $2.1 billion for the fiscal year 2024–25 (July 2024–June 2025), marking its first annual surplus in 14 years, according to the State Bank of Pakistan (SBP). This achievement, driven by record remittances and export growth, signals a robust economic turnaround, boosting investor confidence and stabilizing the rupee.
Record-Breaking Surplus
The SBP reported a $328 million surplus in June 2025, compared to a $500 million deficit in June 2024, capping a year of consistent gains. The fiscal year’s $2.1 billion surplus contrasts sharply with a $1.39 billion deficit in FY24, fueled by a 33% surge in workers’ remittances to $34.89 billion and an 8.7% rise in exports to $20.28 billion in the first half of FY25. Imports, while up 15% to $33.38 billion, were offset by these inflows, narrowing the trade deficit.
March 2025 saw Pakistan’s highest-ever monthly surplus of $1.2 billion, driven by $4.05 billion in remittances, a 71% year-on-year increase, and a record for a single month, as noted by brokerage firms Topline Securities and Arif Habib Limited. The surplus has bolstered foreign exchange reserves to $16.45 billion as of January 2025, reducing pressure on the rupee and supporting IMF negotiations.
Driving Factors
Several factors contributed to this milestone:
- Remittances: A 33% increase to $17.85 billion in the first half of FY25, with peaks during Ramadan and Eid, reflects stronger formal channel flows due to SBP’s crackdown on hundi/hawala systems. Key sources include Saudi Arabia, UAE, the UK, and emerging hubs like South Korea.
- Export Growth: Goods and services exports rose 8.7% to $3.51 billion in March, with technology exports hitting $310 million in April 2024.
- Import Management: Despite a 15% rise in imports, strategic restrictions and lower global commodity prices (e.g., oil, cotton) kept the trade deficit in check.
- Policy Measures: High interest rates (recently cut to 11%) and import controls supported a narrower deficit, while a weaker U.S. dollar aided external balances.
Finance Minister’s Advisor Khurram Schehzad highlighted that low oil prices and record remittances could sustain the surplus into FY26, enhancing investor confidence.
Pakistan’s Economic Context
This surplus aligns with Pakistan’s digital and economic transformation, including the FBR’s shift to e-auctions to curb fraud and PIA’s restructuring to address a Rs. 4.6 billion loss. Newsera: FBR Suspends Manual Auctions Newsera: PIA Reports Rs. 4.6 Billion Loss The $500M+ freelancing economy and AI training initiatives further position Pakistan as a growing tech hub, complementing its economic stabilization. Newsera: Pakistan’s AI Training Push
However, challenges persist, with the World Bank estimating 45% of Pakistan’s population below the poverty line and GDP growth at a modest 2.6% for FY25. Import-driven growth risks future deficits, with analysts projecting a $1.5–4 billion shortfall if imports rise to support economic activity.
What’s Next
Topline Securities forecasts a full-year surplus of $1.24 billion (0.3% of GDP), with potential for continued gains if remittance and export trends hold. The surplus strengthens Pakistan’s position ahead of IMF talks for a long-term bailout, with reserves expected to reach $13 billion by June 2025, per X posts (@xadeejourno, January 27, 2025). Investments like the $2.5 billion IFC funding for Reko Diq and cargo flight agreements with China signal growing economic confidence.
This milestone marks a turning point for Pakistan, reducing reliance on external borrowing and fostering stability. As the nation navigates a $26 billion external debt repayment in FY25, sustained reforms will be key to maintaining this trajectory.
Stay connected with Newsera for the latest on economy, tech, and global news!
