Pakistan’s current account deficit soars 256% on surging import bill
- Current account records deficit of $733 million during July to October FY26
KARACHI: The current account deficit sharply rose by 256 percent in the first four months of this fiscal year (FY26), driven mainly by a rise in the goods import bill.
According to the data released by the State Bank of Pakistan (SBP) on Monday, the country’s current account recorded a deficit of USD 733 million during July to October FY26, compared with USD 206 million in the same period last year. This reflects a widening of USD 527 million.
On a month-to-month basis, the revised data shows that the current account shifted from a surplus of USD 83 million in September 2025 to a deficit of USD 112 million in October 2025.
Pakistan’s current account posts $110mn surplus in September 2025
The shift stemmed largely from a 4 percent MoM increase in the trade deficit, driven by faster growth in imports than exports amid improving domestic demand.
Analysts said that this trend is broadly in line with the expectations as the SBP was already expecting some surge in current account deficit with the uptick of economic activities. Although Pakistan’s exports are also continuing to grow moderately, imports are growing at a relatively faster pace, resulting in a widening trade deficit and higher current account deficit, they added.
The SBP also expects imports to pick up further as economic activity strengthens. At the same time, the outlook for workers’ remittances has also improved. However, despite the surge in the current account deficit, overall, SBP believed that the current account deficit is expected to remain within the earlier projected range of 0 to 1 percent of GDP in FY26.
Pakistan’s import bill continued to surge and rose by 10 percent to reach USD 20.72 billion in the first four months of this fiscal year compared to USD 18.9 billion in the same period of last fiscal year.
On a positive note, inflows of home remittances are increasing more than expectations and USD 3.4 billion worth remittances were received in October 2025 as against USD 3.1 billion in September 2025. With improved home remittances inflows, the SBP is expecting remittances above the target by the end of this fiscal year. In addition, with the realization of planned official inflows are likely to improve SBP’s FX reserves to USD 15.5 billion by December 2025.
According to the SBP, the services account posted a deficit of USD 1.164 billion during July to October FY26, with exports at USD 3.03 billion and imports at USD 4.2 billion. The primary income account recorded a deficit of USD 3.1 billion over the same period, reflecting USD 389 million in inflows against USD 3.47 billion in outflows.
Copyright Business Recorder, 2025
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