Current account surplus hit $349 million in October, says SBP

The State Bank of Pakistan (SBP) said on Monday that country’s external current account recorded a surplus of $349 million in October 2024, marking the third consecutive month of surplus and the highest in this period.

The current account reflects a nation’s transactions with the rest of the world, encompassing net trade in goods and services, net earnings on cross-border investments and net transfer payments.

A surplus indicates that a country is exporting more than it is importing, thereby strengthening its foreign exchange reserves.

Last month’s current account surplus contrasts sharply with the $290 million deficit recorded in October 2023, highlighting a significant improvement in the country’s economy.

“The external current account recorded a surplus of $349 million in October 2024, after showing a surplus of $86 million and $29 million in September 2024 and August 2024 respectively,” the central bank said in a brief statement.

Pakistan has faced economic challenges in recent years, including high inflation, a depreciating currency, and dwindling foreign reserves.

In response, the government has implemented a series of reforms aimed at stabilizing the economy, including securing a $7 billion bailout from the International Monetary Fund (IMF) in September, which is contingent upon measures such as broadening the tax base, reducing energy sector deficits and privatizing state-owned enterprises.

The consecutive current account surpluses, culminating in the substantial $349 million in October, suggest that Pakistan is transitioning from mere stabilization to a phase of economic growth.

This positive trend is bolstered by increased remittances from overseas Pakistanis, which reached a record $11.8 billion in the first four months of the fiscal year, marking a 35 percent year-on-year growth.

Pakistani authorities have emphasized the importance of continuing prudent fiscal and monetary policies to consolidate these gains and ensure long-term economic stability.

The country’s finance chief, Muhammad Aurangzeb, said a day earlier the international lending agencies had acknowledged the improvement in the national economy, though he added that they wanted the government to continue with stringent structural reforms.

“There is no room for complacency,” he added.