KARACHI: Pakistan’s external account position received a major boost in March 2025, as the country recorded its highest-ever monthly current account surplus of US$1.2 billion, according to data released by the State Bank of Pakistan (SBP) on Sunday. The surplus was primarily driven by an unprecedented surge in workers’ remittances, which reached an all-time high of US$4.1 billion during the month.
The March figure marks a dramatic reversal in Pakistan’s current account balance, which had largely remained under pressure in recent years due to elevated import bills, limited export growth, and fluctuating foreign inflows. The current account, which tracks the nation’s transactions with the rest of the world—including trade, services, income, and remittances—had been in deficit for most of the past few years, contributing to exchange rate volatility and external financing challenges.
The extraordinary performance in March was fuelled by remittances sent by overseas Pakistanis, which surged 28% year-on-year and 24% month-on-month to hit US$4.1 billion, surpassing all previous monthly records.
Analysts attribute the spike to a combination of seasonal factors, such as Ramadan and Eid-related transfers, along with improved formal channel flows due to recent government and central bank efforts to curb hundi/hawala systems and incentivise official remittance channels.
The bulk of remittances came from traditional corridors including Saudi Arabia, the UAE, the UK, and the US, with some early signs of growth from emerging diaspora hubs such as South Korea, Italy, and Qatar.
“This record inflow is a strong signal of trust in Pakistan’s financial system by the overseas community,” said a senior SBP official. “It also reflects the success of policy measures aimed at improving the ease and speed of remittance transfers.”
In addition to the remittance windfall, a narrowing trade deficit also contributed to the surplus.
The surplus offers a much-needed cushion for Pakistan’s external financing position, especially as the country heads into budget season and prepares for fresh negotiations with the International Monetary Fund (IMF) for a potential long-term programme. It also reduces pressure on the rupee, which has seen relative stability in recent weeks.
With reserves hovering around the US$9 billion mark, Pakistan’s short-term position has improved—but the real challenge lies in ensuring consistent current account discipline and attracting long-term capital inflows, including foreign direct investment and project-based financing.
If the trend continues into April, Pakistan could be looking at its first quarterly current account surplus in nearly four years, a turnaround that could strengthen the government’s hand ahead of the IMF’s May budget review mission.
