By Staff Reporter
KARACHI: Pakistan’s current account balance swung back into surplus in August, posting a $75 million gain, reversing a $152 million deficit in the same month last year, central bank data showed on Wednesday.
Remittances, which jumped 40 percent year-on-year to $2.9 billion, drove the turnaround. This marked a substantial increase from the $2.1 billion received in August 2023.
“After the 3 months consecutive current account deficit, Pakistan has reverted back to current account surplus in August-2024,” said brokerage Topline Securities. “The improvement in the current account is due to remittances which clocked in at $2.9 billion, up 40 percent year-on-year.”
The improvement was also reflected in the current account deficit for the first two months of the fiscal year, which narrowed 81 percent to $171 million from $893 million in the same period last year.
Exports edged up 0.9 percent to $3.11 billion in August from $3.08 billion in the same month last year, while imports rose 9.7 percent to $5.62 billion.
The trade deficit widened 23.1 percent to $2.51 billion, but narrowed 4.9 percent on a monthly basis. Cumulatively, the trade deficit rose 19 percent to $5.14 billion in the first two months of the fiscal year.
Worker remittances, a key source of foreign exchange, increased 40.5 percent to $2.94 billion in August. Cumulatively, remittances reached $5.94 billion, up 44 percent from the same period last year.
The economic managers have been working to curb the current account deficit, which has been a major concern due to the country’s reliance on imports. Low economic growth, high inflation, and high interest rates have helped narrow the deficit.
The country is seeking another bailout from the International Monetary Fund (IMF). In July, it reached a staff-level agreement on a 37-month, $7 billion Extended Fund Facility. The IMF Executive Board is scheduled to review Pakistan’s program on September 25.
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