Pakistan to get record $36bn in remittances, fuelling current account surplus

ISLAMABAD: Pakistan’s external account is staging a dramatic turnaround, with remittance inflows expected to hit a historic $36 billion by the end of fiscal year 2025 — the highest ever — helping the country swing to a rare current account surplus of $1.9 billion for the July-April period.

This surplus in current account marks a sharp reversal from a $1.3 billion deficit in the same period last year and signals growing resilience in Pakistan’s macroeconomic framework, despite global headwinds. This is only the second time in two decades that Pakistan has posted such a surplus — the last was in FY2003 when the balance hit $4.1 billion. The surge is driven by a 31 per cent jump in remittances, which reached $31.2 billion in July-April 2025, as overseas Pakistanis continue to send more money home amid improved transfer channels and growing confidence in economic management, the Pakistan Economic Survey 2024-25 said.

Finance Minister Senator Muhammad Aurangzeb, while launching this blueprint which depicts the current fiscal performance, said, “Remittances inflows are showing significant growth, and by the end of this fiscal we expect it to be of $36 billion.”

While the trade deficit in goods and services widened modestly, the strength in secondary income and a 6.8 per cent rise in exports — largely led by the textile sector, which now makes up 53 percent of total exports — helped offset the pressure. Import control measures and easing global commodity prices also played a key role in narrowing the external gap.

Despite a $1.6 billion outflow on the financial account — compared to a $4.2 billion net inflow a year earlier — due to higher debt repayments and lower official loan disbursements, Pakistan’s broader economic stability under the IMF’s Extended Fund Facility helped steady the exchange rate and preserve foreign reserves. A recent $1.02 billion IMF disbursement, following a successful program review, boosted investor confidence and signaled a sustainable fiscal path, reflected in a 9.3pc surge in the KSE-100 index amid expectations of stronger capital inflows and renewed economic momentum.