The balance of payments figures of Pakistan for the full year, 2024-25, were released a few days ago by the SBP. There is an overall balance of payments surplus of USD 3.7 billion, in comparison to a surplus of USD 2.9 billion in 2023-24. However, a stark transformation is visible in the nature of the balance of payments in 2024-25 as compared to the magnitudes in 2023-24.

The current account balance has been transformed from a deficit of USD 2.1 billion in 2023-24 to a surplus of USD 2.1 billion in 2024-25. This is due to the quantum jump in home remittances of over USD 8 billion, implying an extraordinarily high growth rate of 38.3 percent.

Clearly, the overall level of remittances is unlikely to have increased by over USD 8 billion. This is due to the intervention by the SBP for the first time in the foreign exchange market and replacement thereby of hundi/havala transactions. In the absence of such a big intervention the likelihood is that the current account would have been in a deficit of USD 6 billion, unless strong physical controls were applied on imports.

Given the enhanced reserves position of the SBP, the controls on imports of goods have visibly been relaxed. The growth in the value of imports of goods has been unusually high at over 11 percent.

The real source of worry is the disappointing performance of exports. They have shown a very modest........

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