Pakistan’s current account deficit narrows to $254m in July 2025

KARACHI: Pakistan’s current account deficit stood at $254 million in July 2025, compared to a deficit of $348 million in the same month last year, according to data released by the State Bank of Pakistan (SBP).

The improvement was mainly driven by higher exports and workers’ remittances, which partly offset a widening trade gap in goods.

Exports of goods rose to $2.74 billion in July 2025, up from $2.36 billion a year earlier, showing growth of over 16 per cent.

Imports of goods, however, climbed to $5.42 billion from $4.85 billion, reflecting an increase of nearly 12 per cent. This pushed the merchandise trade deficit to $2.68 billion in July, compared to $2.49 billion last year.

Current account slips back into deficit amid rising imports: SBP report

The services trade deficit narrowed to $126 million, down from $246 million in July 2024, as exports of services increased to $745 million from $631 million, while imports remained stable at $871 million.

Meanwhile, workers’ remittances increased to $3.21 billion, up from $2.99 billion in the same month last year, providing crucial support to the external account.

On the financial account side, foreign direct investment (FDI) inflows stood at $208 million in July, compared to $195 million in July 2024. Portfolio investment, however, registered a net outflow of $44 million.

Overall, the balance of payments showed a surplus of $91 million in July 2025, against a surplus of $152 million in July last year.

SBP’s reserves, excluding CRR and SCRR, stood at $14.4 billion at the end of July, compared to $9.3 billion in July 2024, indicating a stronger reserve position.

Pakistan’s current account deficit hits lowest level since 2011

Analysts say that while the narrowing deficit reflects some improvement, the rise in imports and continued dependence on remittances highlight the challenges facing Pakistan’s external sector. Sustaining higher exports and attracting stable foreign investment remain critical for easing pressure on the current account in the coming months.