- Current account surplus reached $427 million in February.
- External account stabilised with adequate buffers, says govt adviser.
- Khurram Schehzad terms it key milestone for economic recovery.
KARACHI: Pakistan’s current account surplus increased in February, as per the data from the State of Pakistan (SBP), thanks to the nation’s resilient remittances and lower services imports, The News reported on Tuesday.
The surplus stood at $427 million in February, the most since March 2025. The surplus was $68 million in January this year, while the current account posted a deficit of $85 million in February last year.
The country ran a deficit of $700 million in eight months of this fiscal year, compared with a surplus of $479 million in the same period last year.”The surplus was mainly supported by strong remittance inflows and a notable reduction in the income deficit, which helped offset the still-elevated trade gap,” said Waqas Ghani, head of research at JS Global.
“At the same time, lower services imports and contained import growth also contributed to improving the external balance,” Ghani said. “While the monthly surplus reflects some easing in external pressures, the sustainability of this trend will depend on the trajectory of imports and remittance inflows in the coming months,” he added.
Adviser to the Finance Minister Khurram Schehzad wrote in a post on X that February’s current account surplus was the highest in one year and marks the second consecutive monthly surplus, signalling continued improvement in Pakistan’s external sector.
“The back-to-back surpluses reflect strong remittance inflows, improving value-added exports, and disciplined imports (growth-driven), strengthening macroeconomic stability and easing pressure on external financing,” Schehzad noted.
“Though challenges exist given the regional conflict, Pakistan’s stabilised external account with adequate buffers is a key milestone for sustainable economic recovery and investor confidence.”
Remittances, a crucial lifeline for Pakistan’s economy, are facing risks due to escalating conflict in the Middle East. Iran has halted shipping in the Strait of Hormuz, which is responsible for approximately 20 per cent of the world’s oil and LNG supply, impacting refiners, petrochemical plants, power plants and energy-intensive industries globally.
This situation has resulted in what the International Energy Agency (IEA) has described as the largest disruption to global energy supplies in history, in retaliation for the strikes on Iran by the US and Israel.
According to a recent report from Insight Securities, Pakistan’s economic structure has shifted considerably over the past few decades, with increasing reliance on remittance flows. However, the region most affected by the current geopolitical turmoil is the Middle East, which is also the largest contributor to Pakistan’s remittances, accounting for 55 per cent of total inflows, particularly from the United Arab Emirates and Saudi Arabia. Any disruption in these economies could negatively impact remittance flows if the situation prolongs.
The strong growth in remittances over the years has partly financed Pakistan’s widening trade deficit, the report noted. “At a time when oil prices are already elevated, where every $5 a barrel increase in oil prices raises the import bill by roughly $800 million annually, and exports remain structurally constrained amid rising freight costs, any decline in remittance flows could prove fatal.”
