KARACHI/ ISLAMABAD: Pakistan’s current account posted a surplus for the first time in 14 years in the fiscal year that ended in June 2025, helped by record-high remittances and a decline in the services deficit, the central bank data showed on Friday.
The current account surplus stood at $2.1 billion, or 0.5 percent of GDP, in fiscal year 2024-25 versus the deficit of $2.1 billion, or 0.6 percent of GDP, in the previous year.
In June alone, the country recorded a surplus of $328 million, in contrast to a deficit of $84 million in the previous month and a deficit of $500 million in June 2024.
Topline Securities said in a client note that the FY25 current account surplus represented a significant improvement over the five-year average deficit of $6 billion, or 1.8 percent of GDP. The primary reasons for this surplus included a 27 percent increase in remittances and a 16 percent decline in the services deficit. However, the goods deficit rose by 21 percent year-on-year to $27 billion, while the services deficit fell by 16 percent to $2.6 billion.
The brokerage house added that remittances reached an all-time high of $38.3 billion in FY25, driven by higher incentives offered to financial institutions to facilitate remittances through formal channels, an increase in manpower exports, and a reduction in the exchange rate differential between official and unofficial markets, which encouraged remittance flows through formal channels.
The realisation of planned inflows from multilateral and commercial sources, combined with the surge in remittances, helped Pakistan’s central bank increase its foreign exchange reserves over $14 billion in FY25.
Goods exports rose to $32.295 billion in FY25, up 4 percent from a year earlier. Exports also increased 7 percent year-on-year to $2.602 billion in June. In contrast, imports amounted to $4.986 billion in June, an 8 percent increase from a year earlier but a 9 percent decline compared to the previous month. Overall, goods imports increased 11 percent to $59.076 billion during the last fiscal year
The FY25 current account surplus reflects signs of economic stabilisation under the country’s $7 billion International Monetary Fund loan programme, which was approved in September 2024. However, analysts are cautious about whether this positive trend will continue in the current fiscal year. There are concerns that remittances may not maintain their record-high levels, particularly due to the government’s decision to cut subsidies for banks handling remittances, which could reduce the flow through banking channels. Additionally, the increase in imports adds to this concern.
“We expect the current account to turn into a deficit in FY26 on the back of an uptick in imports due to recovering aggregate demand, mainly. Our forecast for FY26 is a current account deficit of $2.4 billion, or 0.6 percent of GDP,” said Mustafa Mustansir, the head of research at Taurus Securities.
Topline expects a slight deficit of $0.5 billion to $1.5 billion (0.1-0.3 percent) of GDP in FY26.
Meanwhile, Prime Minister Shehbaz Sharif expressed his gratitude as the country’s current account surplus reached $2.1 billion in the fiscal year 2024-2025 - the highest ever during the last 22 years.
The prime minister, in a statement, called the surge in current account surplus “highly encouraging development”, and said that the government’s strategic measures led to a boost in foreign exchange reserves to over $19 billion.
He said that stability in the current account surplus was primarily driven by a substantial increase in remittances and exports.
He said that the improving financial and economic indicators demonstrated that Pakistan’s economy was on the path to stability.
The government was prioritising measures to enhance the business and investor-friendly environment in the country, he said, and also commended the efforts of the government’s economic team in this journey.
Meanwhile, chairing a meeting on encouraging usage of electric vehicles in the country, the prime minister said that encouraging the use of EVs will help save billions of dollars in valuable foreign exchange spent on fuel, support environmental protection efforts, and promote the local industry.
He directed to prepare a comprehensive government-level action plan to make electric vehicles accessible to the common citizen.
He announced that the federal government would provide electric bikes to top-performing students of all educational boards across the country, including the federal board.
He further stated that unemployed individuals would be provided with electric rickshaws and loaders on priority, to support employment generation.
The prime minister instructed that concrete steps be taken to establish a complete ecosystem for the manufacturing and maintenance of electric vehicles in the country.
He also ordered third-party validation of the entire process of EV distribution and the government support mechanism to ensure transparency and accountability.
Highlighting the need for inclusivity, the prime minister emphasised that economically disadvantaged individuals should be prioritised in the government-supported electric vehicle schemes.
He further directed the launch of a public awareness campaign to educate citizens about the government assistance programmes for obtaining electric vehicles.
To ensure safety and performance, the prime minister instructed that the electric bikes, rickshaws and loaders to be provided under the proposed scheme must meet high-quality and safety standards.
A briefing was given in the meeting regarding the current status of the industry in the country related to the manufacturing of electric vehicles and the government’s supportive measures to make them accessible to the common people.
It was informed in the meeting that the government was taking steps to facilitate the acquisition of electric bikes, rickshaws and loaders through low-cost loans and easy terms.
More than 100,000 electric bikes and over 300,000 and loaders would be made available to the public under easy loans and at low costs through government support.
The meeting was informed that under this scheme, students who perform well at the intermediate level in educational boards across the country, including the federal board, would be provided free electric bikes.
It was also informed that a special quota of 25 percent had been allocated for women in this scheme, while the remaining quota had been distributed among the provinces based on population ratios.
The prime minister directed to increase Balochistan’s quota up to 10 percent.
Furthermore, the meeting was informed that due to this scheme, four new battery manufacturing companies were commencing operations in the country, which will create new business opportunities and employment in Pakistan.
The prime minister instructed to ensure the timely launch of this scheme based on these proposals.
The meeting was attended by Federal ministers Ahad Khan Cheema, Attaullah Tarar, Special Assistant Haroon Akhtar, Chief Coordinator Mosharraf Zaidi and other senior officials.
