Pakistan's Current Account Posts Third Straight Monthly Surplus Positive Trends Amidst Ongoing Economic Challenges

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According to data released by the State Bank of Pakistan on Monday, the country achieved a $349 million surplus in October, compared to $86 million in September. This positive trend is encouraging for the government, as the current account showed a positive $218 million during the July-October period, in stark contrast to a deficit of $1.528 billion in the same timeframe last year.

This achievement is significant for a government grappling with massive debt servicing. Financial sector sources indicate that the government has yet to secure a rollover for $14 billion to help manage $26.2 billion in debt repayment obligations for the current fiscal year.

Despite these challenges, the government remains optimistic that the current account will be positive or at least post a manageable deficit by the end of FY25.

Data indicates that the improvement in the current account is primarily attributed to a substantial 34.7% increase in remittances during the first four months of FY25, alongside a 32% rise in foreign direct investment and marginal growth in both imports and exports.

Experts suggest that the surplus is a cumulative result of these factors, but emphasize that exports need to increase significantly to address the large trade deficit, which poses a chronic threat to the current account surplus.

In the first four months, the country's total export of goods and services amounted to $13.11 billion, while imports reached $22.43 billion, resulting in a trade gap of $9.31 billion compared to $8.1 billion last year.