Pakistan records $397 million current account surplus as exports, remittances increase

In December 2023, Pakistan’s current account exhibited a noteworthy surplus of $397 million, a stark departure from the $15 million deficit recorded in November, as reported by the State Bank of Pakistan (SBP) on Wednesday. 

This surplus is attributed to heightened exports and remittances, coupled with a marginal decline in imports. Notably, there was a substantial improvement compared to the $365 million deficit posted in December 2022.

According to SBP data, exports (goods and services) surged to $3.526 billion in December 2023, marking a 14 per cent increase from $3.089 billion in December 2022. Concurrently, remittances rose to $2.38 billion, a 13 per cent marginal increase from the same period last year. 

Conversely, total imports saw a 2 per cent decrease, totaling $4.97 billion in December 2023, compared to $4.98 billion in the corresponding period last year.

In the cumulative period of July–December FY24, Pakistan experienced a current account deficit of $831 million, a substantial reduction from the $3.63 billion deficit recorded during the same months in FY23—a remarkable decline of over $2.8 billion, or 77 per cent. 

The SBP, in its recent Monetary Policy Committee meeting on December 12, highlighted a significant improvement in the current account balance, with the deficit narrowing by 65.9 per cent year-on-year to $1.1 billion during July-October FY24.

The current account’s pivotal role is underscored by its impact on Pakistan’s economy, which is heavily reliant on imports. 

A widening deficit exerts pressure on the exchange rate and depletes official foreign exchange reserves, making these recent developments crucial for the nation’s economic outlook.