KARACHI (The COW News Digital) Pakistan’s fragile external sector is under renewed pressure as the country’s current account deficit surged to $733 million in the first four months of fiscal year 2026, more than three times higher than the $206 million recorded during the same period last year.
October further worsened the situation, with the current account posting a $112 million deficit, compared to a $83 million surplus in September. According to the latest data from the State Bank of Pakistan, the cumulative deficit from July to September FY26 had already reached $621 million, in contrast to a $83 million surplus during the same period last year.
Read More:
Late-Night Dinners Linked to Higher Blood Sugar Risk
Analysts attribute the rising deficit largely to a significant increase in imports coupled with sluggish export growth. Between July and October FY26, Pakistan’s total trade deficit in goods and services rose to $11.26 billion, compared to $9.61 billion in the previous year.
Goods exports showed only marginal improvement, rising 2% to $10.63 billion from last year’s $10.42 billion. October exports fell slightly to $2.75 billion, down from $3 billion in October 2024. Services exports provided some relief, reaching $3.03 billion, with IT and telecom exports contributing $1.44 billion, a notable increase compared to last year.
On the import side, goods imports climbed to $20.72 billion, up 9.6% from $18.90 billion the previous year. Services imports also rose to $4.20 billion. The primary income deficit remained a significant challenge, totaling $3.09 billion over the four months, including a $905 million shortfall in October alone.
Remittances continued to support Pakistan’s external accounts, increasing to $12.96 billion. However, the rapid rise in the trade deficit has offset much of this relief. The fiscal account also remained under pressure, posting a $605 million deficit over four months, while foreign direct investment (FDI) fell to $748 million.
Despite foreign exchange reserves rising to $14.64 billion by the end of October, the growing current account deficit and looming debt repayments in the coming months pose fresh risks to the country’s external stability. Economists warn that sustained trade imbalances and slow export growth could exacerbate pressure on Pakistan’s financial position unless corrective measures are taken promptly.
