The monthly economic forecast report of the finance ministry on Tuesday indicated that the seasonal elements of Ramazan and Eid projected to keep the remittances on their increasing trend.
It said, “The external account position has strengthened, driven by continued increase in exports and a noteworthy rise in remittances despite an upward trend in imports,” adding that seasonal factors “will help to keep the current account within manageable limits.”
With the nation registering a surplus of $691m in the first eight months of FY25 against a CAD of $1.7 billion a year before, the current account deficit (CAD) had dropped to $12 million in February from $420 million in the previous month.
The excess over the eight months has been ascribed by experts to the 32 percent increase in remittances. Furthermore noted was that Ramazan helped the nation maintain a steady exchange rate with somewhat greater foreign exchange reserves by supporting more inflows.
Still, the central bank’s foreign exchange reserves—which aim to reach $13 billion by the end of FY25—are still just roughly $11 billion.
With an inflow of $24 billion in July-Feb fiscal year 2025 as opposed to $18.1 billion last year, the report observed that workers’ remittances stood at “an impressive growth” of 32.5pc.
It underlined that Saudi Arabia (24.6pc) has the biggest proportion among workers’ remittances followed by UAE (20.3pc).
Regarding foreign direct investment (FDI), it was reported as $1,617.4m, a 41pc rise from the amount in the year before.
“The largest share (40.9pc) is from China $661.8m; followed by the UK at 10.3pc and Hong Kong at 9.9pc,” it stated.
“The power sector received net FDI of $570.2m (35.7pc share), followed by financial business with $466.4m (28.8pc) and oil & gas exploration with $196.6m (12.1pc),” it stated.
“The fiscal deficit reduced to 1.7 pc of GDP in July-Jan FY2025 from 2.6pc last year,” the paper also noted, stressing how small the deficit had gotten.
Regarding trade, the finance ministry underlined that imports and exports were likely to rise, stating that the country’s main exporting markets included of UK, US, European countries and China — all varying above the potential level of 100.
It said, ” Goods exports increased by 7.2pc to $21.8bn compared to $20.4bn last year; imports recorded an increase of 11.4pc to reach $38.3bn.”
