Against the backdrop of complex dynamics in global markets, Pakistan’s economic indicators look promising by October 2024 as they narrate a growth story with stabilization. From the skyrocketing export revenues to the narrowing trade deficit, these happenings indicate that the nation at large is striving to rein in its financial footing again. With compounding influences of remittances, foreign direct investment, and improved current account figures, there sits a tale of resilience and adjustment in view of continuous challenges posed.

Pakistan’s exports showed a rise of 11% in October 2024 compared to October 2023, adding $2.98 billion to Pakistan’s foreign exchange reserves. The Pakistan Bureau of Statistics reported that exports had surged 5% during the month compared with September 2024. Imports in October 2024 increased by a year-on-year 6% and stood at $4.60 billion. Compared to September, the imports were slightly off by 1%. The trade deficit improved significantly – 24% lower year-on-year at $1.60 billion in October 2024. The trade deficit had reduced by 11.70% month on month.

The overall trade deficit for the first four months of the current fiscal year tallied at $7.8 billion, down 4.12% from $7.39 billion during the same period last year. Exports continued to grow by 13.55% and totaled $10.89 billion while imports surged by 5.86% to reach $17.97 billion.

Meanwhile, the rupee appreciated slightly against the US dollar by 9 paisas. The dollar rate declined from Rs. 277.74 to Rs. 277.67 in inter-bank trading over the past week.

The current account of Pakistan witnessed a surplus of $ 119 million in September 2024. The gap was nothing but compared to that recorded in September 2023, which stood at $ 218 million. This publication has been compiled by the State Bank of Pakistan (SBP). This marks the second successive month of a current account surplus that is the highest since March 2024. It has come down from $75 million for August 2024 to $29 million. Cumulatively, the current account deficit for the first three months of FY2025 is placed at $98 million, steeper than the 92% decline in the same period last fiscal when the deficit was recorded at $1.241 billion. Pakistan’s total exports of goods and services in September 2024 stood at $3.302 billion, while they have more than increased 10% from those in September 2023, valued at $2.999 billion. The imports in the same month had surged almost 15% year-over-year to $5.574 billion from the State Bank of Pakistan (SBP).

Worker remittances increased by 29% to $2.849 billion in September 2024, compared with $2.208 billion in September 2023 but were marginally 3% lower than the $2.943 billion seen in August 2024. In the first three months of FY 2024-25, it was registered to have almost risen by nearly 39% year-on-year in the same period of the previous fiscal year at $8.8 billion compared with $6.3 billion. Stability in the exchange rate, reduction of the gap between open and interbank market rates, and increased worker emigration are major causes. As such, remittances continue to offer much-needed inputs into Pakistan’s external accounts, boost economic activity, and supplement household incomes.

Pakistan also took in $771 million in FDI in FY2024-25; this increased by 48 percent year-on-year versus the $520 million recorded in the same period last year, indicating increasing investor confidence. Chinese FDI led the rankings with a remarkable increase in share to $404 million or 52 percent of the total FDI compared with $164 million in the previous fiscal year. The tally for Chinese FDI for September was at $244.8 million.

Contributions from other areas were much lower. FDI from Saudi Arabia was particularly minimal, at $1.8 million for the quarter, though Hong Kong was a big contributor with its inflow of $98 million, up from $67 million in the same period last year. The United Kingdom invested $72 million and the United States, $28 million. Arab countries invested relatively modest sums, with government efforts via the Special Investment Facilitation Council yet to yield much. However, its total contribution was only as meager as $1.8 million, while the UAE had invested $25 million.

Interestingly, many Pakistan-based companies operating in the UAE are reinvesting in Pakistan as foreign entities to benefit from investment incentives and risk guarantees.

In addition to all this growth in exports and the rise in remittances, controlled import growth, and especially a high-interest rate environment and controls on imports, these have together stabilized the economy and subdued the adverse factors of low economic growth and inflation.

Resurgence in the economy for Pakistan is a tapestry woven with threads of willpower and strategy. Events such as upswing in exports, remittances, deft import management, and foreign investment flows are all going to prove that this is, indeed, a journey into optimistic linearity. Inflation and subdued growth are still on-going challenges, but the positive indicators converging together still tell a hopeful story of economic stabilization and resilience for the nation.