Karachi: Pakistan's current account deficit (CAD) significantly contracted to $681 million in FY24, a decrease of 79% year-over-year, achieving a near breakeven point at 0.2% of GDP, marking a 13-year low.

According to JS Global, the notable decrease in the CAD was supported by a surplus recorded in four of the twelve months, with the remainder of the year maintaining a nearly balanced current account. This financial year ended with a CAD that is one of the lowest in the last 19 years. Despite facing a high income deficit in June, similar to May, which reached $1.1 billion, the overall balance was maintained due to robust remittance inflows, which outweighed a $1 billion trade deficit.

In terms of balance of payments (BoP), June saw a surplus of $500 million, driven largely by fresh loans totaling $2.1 billion, despite the repayment of $1.6 billion. The financial account also showed a surplus of $824 million in June, contributing to a total BoP surplus of $2.9 billion for FY24. Looking forward, JS Global projects the CAD to stabilize at approximately 0.6% of GDP for FY25, largely due to a balanced trade deficit and ongoing remittance inflows, although global oil prices remain a significant risk factor.