Pakistan’s current account deficit widens to $733 million

KARACHI: Pakistan’s current account deficit jumped to $733 million during the first four months of FY26 (July–October), sharply higher than the $206 million deficit recorded in the same period last year.

According to data released by the State Bank of Pakistan (SBP), the country posted a $112 million deficit in October 2025 alone, reversing the surplus trends seen in earlier months. In September, the current account had shown a surplus of $110 million, while October 2024 recorded a surplus of $296 million.

Trade Position Weakens

The SBP data showed that the trade deficit in goods and services widened significantly as goods exports (FOB) rose modestly to $10.63 billion in Jul–Oct FY26, compared to $10.42 billion last year.

According to the SBP, goods imports (FOB) increased sharply to $20.72 billion, up from $18.90 billion. This pushed the goods trade deficit to $10.09 billion, compared to $8.47 billion in the same period last year.

The combined deficit in goods, services, and primary income reached $14.34 billion, higher than $12.69 billion a year earlier.

Primary Income Outflows Remain Heavy

Primary income outflows (mainly profit repatriation and interest payments) remained high at $3.48 billion in Jul–Oct FY26, compared to $3.43 billion during the corresponding period last year.

Remittances Support Secondary Income

According to the SBP, secondary income — driven heavily by workers’ remittances — continues to cushion external accounts as remittances rose to $12.96 billion in the four-month period, up from $11.85 billion last year.

The SBP said that total secondary income reached $13.61 billion compared to previous $12.48 billion .

Financial Account Shows Lower Outflows

The financial account posted net outflows of $605 million in Jul–Oct FY26 — a significant improvement compared to $965 million net outflows last year.

Direct investment in Pakistan during the period stood at $748 million, down from $1.01 billion, the data showed.

Foreign Reserves Hold Steady

SBP’s foreign exchange reserves (excluding CRR/SCRR) stood at $14.63 billion at the end of October 2025, maintaining stability despite rising external pressures, the report said.

Upcoming External Payments Add Pressure

Pakistan faces $4.864 billion in external payments between October and December. This includes the maturity of a $3 billion Saudi deposit in the first week of December.

Officials said Pakistan plans to seek an extension on the Saudi deposit; if granted, the external payment burden for the quarter would drop to $1.864 billion.