Moaaz Manzoor

Pakistan recorded a current account surplus of $582 million in December 2024, reflecting a significant 109% rise compared to $279 million in the same month last year, reports WealthPK quoting data from the State Bank of Pakistan (SBP).

This marks the fifth consecutive month of surplus, bringing the total to $1.21 billion for the first half of FY25, compared to a deficit of $1.397 billion in the same period last year. In December, exports increased by nearly 9% to $3.838 billion, while imports surged over 15% to $5.781 billion. Remittances, a key contributor, rose 29% year-on-year to $3.079 billion, with a record $17.85 billion sent in the first half of FY25, reflecting an annual increase of 33%.

Speaking with WealthPK, Muhammad Waqas Ghani, Deputy Research Head at JS Global, emphasized that the government must cautiously consider interest rate cuts to prevent the inflationary pressures that could destabilize the balance of payments. He underscored that the balance of payments remained positive at $1.7 billion for 1HFY25, but sustaining it required a careful policy calibration.

Macroeconomist Asad Ejaz Butt of the University of Massachusetts, Boston, pointed out the importance of aligning Pakistan’s economic policies with global trends to achieve macroeconomic stability. He stressed that export growth and resilience to global and localized economic shocks were vital for long-term sustainability. Stability in the PKR-dollar exchange rate was also highlighted as a critical factor in maintaining the current account surplus.

With remittances playing a significant role in maintaining the surplus, experts stressed the need to mitigate reliance on the external inflows by fostering productivity and reducing unnecessary imports. The widening trade deficit in December underscores the urgency of diversifying exports and enhancing competitiveness in the global markets. The policymakers are urged to balance short-term gains with long-term economic reforms, ensuring inflation remains controlled while supporting industries that can drive sustainable growth.

Pakistan’s current account surplus demonstrates significant progress but requires prudent policy actions and structural reforms to maintain this trajectory. Stabilizing the exchange rate, curbing unnecessary imports, and fostering export competitiveness are essential to sustain positive trends and minimize external vulnerabilities. Aligning domestic policies with the global economic dynamics will ensure long-term resilience.

Credit: INP-WealthPk