KARACHI: Pakistan’s current account surplus hit a record high in March, largely driven by a sharp rise in remittances, data from the central bank showed on Thursday.
The surplus reached $1.2 billion, the largest since comparable data became available. According to a note from Topline Securities, the highest monthly reported figure for the current account surplus was $981 million in August 2012.
The surplus in March represented a 229 per cent increase from a year earlier. However, the country experienced a $97 million current account deficit in the previous month. For the first nine months of the fiscal year 2025, Pakistan recorded a current account surplus of $1.9 billion, in contrast to a deficit of $1.7 billion during the same period last year.
Remittances have been a key support for the country’s balance of payments, as these inflows reached an all-time high of $4.1 billion in March. This seasonal boost was likely driven by pre-Eid inflows and improved use of formal banking channels amid regulatory tightening. Additionally, the increasing number of Pakistani citizens going abroad for work contributed to the rise in remittance flows. The State Bank of Pakistan forecasts total remittances for FY25 to reach approximately $38 billion, up from $30.25 billion last year.
“While the March surplus is encouraging, sustaining this trend may be challenging in the coming months as remittance flows normalise post-Eid and import demand potentially picks up with gradual economic recovery,” said Saad Hanif, the head of research at Ismail Iqbal Securities.
“The current account is expected to remain broadly manageable, supported by ongoing IMF-backed reforms, improved FX inflows, and a relatively stable Pakistan Rupee. However, any spike in global oil prices or policy slippage could weigh on the balance going forward,” Hanif added.
“Despite a record current account surplus in March, FX reserves saw no benefit due to a steep $1.7 billion financial account outflow, led by banking and debt-related pressures,” he said.
Prime Minister Shehbaz Sharif Thursday expressed satisfaction over Pakistan’s current account surplus of $1.2 billion in March 2025, which was the highest in history.
In a statement issued here, he termed the current account surplus a reflection of a stabilising economy. The PM said, “Thanks God, the current account surplus was $1.85 billion in the first 9 months of this fiscal year. The recent positive economic indicators are a reflection of the right direction of government policies.” The PM attributed the development to record remittances, increasing exports and the tireless efforts of the government’s economic team. “We are striving for sustainable development of the country’s economy,” he said.
Meanwhile, Pakistan’s top commercial banks have signed a Rs1.275 trillion ($4.6 billion) rescue plan for the country’s struggling power sector, agreeing to refinance existing debt and inject fresh capital to contain the ballooning circular debt, sources told The News on Thursday. The banks will offer the critical financial lifeline to arrest the buildup of circular debt and stave off a deeper energy crisis, people familiar with the matter confirmed. They said a term-sheet was signed at HBL Karachi between the government and commercial banks, with disbursement expected to start from next month.
However, when The News contacted the HBL media consultant, he confirmed the development but refused to divulge details, saying, “At this time, we cannot share the information with the media.”
Notably, as part of the deal, banks will refinance Rs658 billion in previously issued term finance certificates through Pakistan Holding Company (PHCL), while providing a fresh loan of Rs617 billion to the government-run Central Power Purchasing Agency (CPPA), which manages power procurement from generation companies.
The funds will be used to reduce a portion of the Rs2.5 trillion circular debt stock that has choked the sector’s liquidity and strained public finances.
The loan will be disbursed at a return of 10.5 per cent to 11 per cent — equivalent to the Karachi Interbank Offered Rate (KIBOR) plus 90 basis points — and repaid over a six-year period, official said. Consumers will ultimately bear the cost, paying a debt servicing surcharge (DSS) of Rs3.23 per unit of electricity, according to the term-sheet shared between the banks and CPPA, he said.
Eighteen banks will participate in the transaction, with contributions based on their 2024 financial statements. The National Bank of Pakistan will be the largest lender, followed by Habib Bank, United Bank, and MCB and others.
The agreement marks one of the largest coordinated efforts by Pakistan’s banking sector to stabilise the energy value chain, which continues to suffer from technical losses, poor governance and delayed payments to independent power producers (IPPs).
On the other hand, Pakistan’s textile exports rebounded sharply in March 2025 with a 9.97 per cent year-on-year surge to $1.43 billion, regaining double-digit growth after stagnating in February. The monthly uptick, however, was a modest 1.2pc from February’s $1.41 billion, signalling a slowdown following several months of robust performance.
The textile rebound comes after a brief lull in February when exports rose only 0.44pc—a sharp contrast to the double-digit expansion recorded from August 2024 through January 2025.
Food exports slumped 16.7pc to $576.2 million in March, largely weighed down by a 33.6pc plunge in rice shipments to $274.3 million as India reopened its rice market. Basmati rice exports declined 7.2pc to $77 million, while other rice varieties dropped 40.3pc to $197.3 million.
On the import side, the petroleum group recorded an 18pc annual decline to $1.23 billion in March. Crude oil imports plunged 32pc to $431.9 million, LNG fell 22.9pc to $226 million, and LPG was down 5.3pc to $76.4 million. Only refined petroleum products showed a slight uptick of 0.64pc to $500 million.
Machinery imports increased marginally by 1.35pc to $822 million. Mobile phone imports dropped 14.2pc to $131 million in March 2025 over same month of last year.
Transport imports soared 65pc year-on-year to $214.3 million. Completely built units (CBUs) of motor vehicles rose 19.9pc to $24 million, while imports of completely and semi-knocked-down (CKD/SKD) units for cars and heavy vehicles skyrocketed 90.3pc to $152 million. Motorcycle imports increased 64pc to $4.8 million.
Meanwhile, Pakistan Privatisation Commission Thursday approved prequalification criteria for prospective investors to bid for controlling stake in the national airline, Pakistan International Airlines Corporation Limited (PIACL). A fresh call for expressions of interest (EoIs) will be issued next week, opening the door to local and foreign investors, seeking between 51pc and 100pc equity in the national carrier. The decision was taken on Thursday at a meeting of the Privatization Commission Board, chaired by Muhammad Ali, prime minister’s adviser on privatisation and chairman of the Privatisation Commission.
“Two key changes have been made,” a government official familiar with the matter told The News. “First, the criteria have been made more specific to ensure only strong companies can qualify. Second, additional incentives are now being offered — such as GST exemptions on new aircraft and debt reduction from the airline’s balance sheet — to present PIA shares on a net-zero balance sheet.”
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