Pakistan April C/A Surplus shrinks by 99% on an annual basis but remain above forecasts

• Smaller surplus attributed to higher imports of goods, lower exports.
• A year, the surplus of the current account decreased by 96%, according to the SBP.
• Analysts were mostly expected that the current account was negative.
  

Karachi: Pakistan has published a smaller surplus of current transactions in April, limiting the previous month and the same period last year, but still exceeding the expectations of a deficit.

The current account surplus was reduced to $ 12 million, a 99% reduction from the previous month. Year in year, the surplus decreased by 96%, according to figures published Friday by the Pakistani Bank (SBP).

During the 10 months that led to April 2025, the surplus reached $ 1.88 billion, showing a significant improvement in a $ 1.33 billion deficit during the same period last year.

Most analysts had expected that the current account is negative, mainly due to a monthly slowdown in remittances. Cash sent home from Pakistanis living abroad decreased to $ 3.2 billion in April, a 22% decrease over the previous month.

However, remittances increased by 13% compared to last year. Inputs for the period from July to April of FY25 increased by 31%, totaling $ 31.2 billion.

The smaller surplus is mainly attributed to an increase in imports of goods and a decrease in exports of goods. Analysts also scored divergences in the commercial data reported by the SBP and the Pakistan Office of Statistics (PBS).

According to PBS, the total commercial gap was $ 3.43 billion, while SBP reported a $ 2.6 billion gap. In April, exports of goods according to PBS were $ 2.1 billion, while SBP recorded exports of $ 2.6 billion for the same month.

In April, imports of goods increased by 18% annually to $ 5,237 billion, compared to $ 4.44 billion in the same month last year. On a monthly basis, imports of goods also increased by 6%.

“The current account has published surplus, driven by strong inputs of remittances, unusually low dividend and interest payments, as well as a reduction in services imports,” said AWAIS Ashraf, director of AKD Securities Limited.

“This improvement came despite imports exceeding 7% this year and exports are reduced by 4% below average,” Ashraf added.

Analysts believe that the current account will continue to remain in a surplus for FY25.

“We expect the country to record a surplus of current transactions of $ 1.6 billion in FY25, marking the first surplus after 14 years. This improvement is mainly due to a significant 24% increase on an annual basis of employees, which is expected to reach $ 37.4 billion.” The head of research at Arif Limited, in a note.

The balance of payment data comes after Pakistan received a second tranche of $ 1.02 billion from the International Monetary Fund (IMF) as part of a $ 7 billion loan program.

This disbursement further strengthened the Central Bank’s foreign exchange reserves and strengthened macroeconomic stability, restoring more confidence in Rupia and the country’s external position.

The currency reserves possessed by SBP amounted to $ 10.40 billion since May 9th. According to SBP, the disbursement of the IMF loan will be reflected in its reserves for the week expiring on May 16.

Last week, the IMF completed its first 37 -month loan agreement with Pakistan last year, unlocking $ 1 billion for Pakistan. It also approved a new $ 1.4 billion loan to help the country get climate.

Earlier this month, tensions increased between India and Pakistan, both neighboring nuclear armed. But after conversations and pressure from the United States, the two sides agreed on a ceasefire.