Karachi September 18 2024: In August 2024, Pakistan’s current account balance turned positive registering a surplus of USD 75 million, after remaining in negative for a period of three months, according to data released by State Bank of Pakistan.
The balance of trade in goods remained in deficit, but the deficit narrowed by 9 percent, falling to USD 2,227 million from USD 2,445 million in July. This improvement was driven by a rise in exports and a slight decline in imports. Exports of goods reached USD 2,488 million, marking a 5 percent increase from the USD 2,374 million in July. On the other hand, imports of goods experienced a 2 percent reduction, dropping from USD 4,819 million in July to USD 4,715 million in August.
In the services sector, the balance also remained in deficit, but the gap widened. The balance on trade in services showed a USD 280 million deficit in August, a 47 percent increase compared to the USD 191 million deficit in July. While exports of services dipped slightly by 2 percent to USD 620 million, the imports of services grew by 9 percent, rising to USD 900 million.
The balance on primary income saw some relief, with the deficit shrinking by 32 percent. It improved from a deficit of USD 764 million in July to USD 521 million in August due to lower interest and dividend repatriation. Meanwhile, the balance on secondary income, which includes remittances, showed a stable performance. Although remittances slightly decreased by 2 percent, falling to USD 2,943 million from USD 2,995 million, the overall secondary income balance remained strong at USD 3,103 million.
As a result of these movements, Pakistan’s current account balance for August 2024 turned positive, registering a USD 75 million surplus, reversing from a USD 246 million deficit in July.
When looking at the cumulative numbers for the first two months of FY25 (July-August), Pakistan’s current account balance stood at a deficit of USD 171 million, showing improvement compared to the USD 893 million deficit in the same period of FY24. This change was largely driven by a stronger secondary income balance, which increased by 42 percent, due to notable rise in remittances by 44 percent over the same period last year. However, the balance of trade in goods worsened by 22 percent YoY, with the trade deficit in goods expanding to USD 4,672 million from USD 3,840 million in the same period of FY24.
