ISLAMABAD: Pakistan recorded a current account surplus of $729 million in November 2024, the highest monthly surplus since February 2015, according to data released by the State Bank of Pakistan (SBP). This significant milestone marks a sharp improvement from the $148 million deficit recorded in November 2023 and continues a streak of four consecutive months of surplus.
Key Drivers of the Surplus
- Trade Deficit Reduction:
- The trade deficit shrank by 14% month-on-month to $1.361 billion, driven by a 10% drop in goods imports to $4.136 billion and a 3% year-on-year increase in goods exports to $2.775 billion.
- Services deficit also declined 43% month-on-month, reaching $152 million.
- Lower Repatriations:
- Interest and dividend repatriations fell, contributing significantly to the surplus.
- Remittances:
- Despite a 5% month-on-month decline, remittances surged 29% year-on-year, totaling $2.9 billion in November.
- For the fiscal year to date, remittances reached $14.8 billion, up 34% from the same period last year, aided by the government’s crackdown on the unofficial dollar market.
Monetary Policy and Economic Growth
The SBP recently cut its policy rate by 200 basis points to 13%, its fifth consecutive rate cut in 2024, amounting to a total reduction of 900 basis points since June.
- SBP Governor Jameel Ahmad projected a continued current account surplus, estimating that the deficit for FY25 would fall within 0-1% of GDP.
- He also highlighted efforts to maintain foreign exchange reserves, forecasting they would exceed $13 billion by June 2025.
Government Response and Future Outlook
Prime Minister Shehbaz Sharif expressed satisfaction with the record surplus, describing it as evidence of the government’s effective economic policies.
- The prime minister emphasized that:
- The reduced policy rate would stimulate investment and economic growth.
- Improved economic indicators would boost local and foreign investor confidence.
- A home-grown economic plan is set to be unveiled soon, which is expected to further enhance economic stability.
Challenges and Additional Remarks
Despite positive economic news, Shehbaz Sharif stressed the need to address lingering challenges, including:
- The continued fight against polio, with Pakistan being one of the few countries still facing outbreaks.
- The tragic loss of Pakistani lives in the recent boat capsizing incident near Greece, highlighting the need for enhanced safety measures for overseas workers and travelers.
Conclusion
The record-breaking current account surplus in November reflects a combination of improved exports, remittances, and reduced deficits in trade and services. With continued focus on economic stability, the government hopes to build momentum for sustained growth and attract both domestic and foreign investment.
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