The finance ministry, in its monthly economic outlook report released on Tuesday, stated that remittances are expected to maintain their upward trajectory due to the seasonal factors of Ramadan and Eid.
“The external account position has strengthened, driven by a continued increase in exports and a noteworthy rise in remittances despite an upward trend in imports,” the report said, adding that seasonal factors “will help to keep the current account within manageable limits.”
The current account deficit (CAD) declined to $12 million in February from $420 million in the preceding month—with the country recording a surplus of $691 million in the first eight months of FY25, compared to a CAD of $1.7 billion a year ago.
Experts have attributed the surplus during the eight months to a 32 percent surge in remittances. It was also observed that due to Ramadan, higher inflows supported the country in maintaining a stable exchange rate with relatively improved foreign exchange reserves.
However, the central bank’s foreign exchange reserves, which aim to reach $13 billion by the end of FY25, are still around $11 billion.
The report noted that workers’ remittances experienced “an impressive growth” of 32.5 percent—with inflows of $24 billion during July-February FY25, compared to $18.1 billion last year.
It highlighted that the largest share of workers’ remittances came from Saudi Arabia (24.6 percent), followed by the UAE (20.3 percent).
Regarding foreign direct investment (FDI), the report stated that it was recorded at $1,618.4 million—a 41 percent increase from the previous year’s figure.
“The largest share (40.9 percent) is from China, $661.8 million,” it said, followed by the UK at 10.3 percent and Hong Kong at 9.9 percent.
“The power sector received net FDI of $578.2 million (35.7 percent share), followed by financial business with $466.4 million (28.8 percent) and oil & gas exploration with $196.6 million (12.1 percent),” the report stated.
The report also highlighted that the fiscal deficit had narrowed, stating: “The fiscal deficit reduced to 1.7 percent of GDP in July-January FY25 from 2.6 percent last year.”
Regarding trade, the finance ministry emphasized that imports and exports are expected to rise, noting that the country’s key export markets include the UK, US, European countries, and China—all fluctuating above the potential level of 100.
“During July-February FY25, goods exports increased by 7.2 percent to $21.8 billion, compared to $20.4 billion last year,” the report said, adding that “imports recorded an increase of 11.4 percent, reaching $38.3 billion.”
