Pakistan has recorded a current account surplus of $2.1 billion or 0.5% of GDP in FY25 after 14 years of deficit, a significant improvement over the $2 billion deficit recorded in FY24 and the five-year average of $6 billion or 1.8% of GDP.
The current account surplus has been attributed to a 27% increase in remittances to $38.3 billion and 16% decline in services deficit to $2.6 billion. The past fiscal year also saw the goods deficit increase by 21% to $27 billion.
Fiscal year 2024-25 also marked another milestone for the country, as March saw an all-time high surplus of $1.3 billion due largely to remittances exceeding $4 billion. The remittances surge has resulted from higher incentives offered to financial institutions to facilitate remittances through formal channels, increase in manpower exports, and reduced differential of exchange between official/unofficial market, encouraging routing through formal channels.
In a posting on X, Prime Minister Shehbaz Sharif described the surplus as a “historic” milestone. “For the first time in 14 years, Pakistan has posted a $2.1 billion annual current account surplus, and the largest after 22 years,” he wrote, citing record remittances, rising exports, and a “laser focus on structural reforms.”
Maintaining the achievement reflected the confidence of overseas Pakistanis and the resolve at home, he appreciated the government’s economic team for their commendable efforts.