KARACHI: The country’s current account deficit has narrowed sharply 36 percent in the first two months (July – August) of fiscal year 2026-27 supported by healthy home remittances inflows.
According to the State Bank of Pakistan (SBP) data issued on Wednesday, the current account posted a deficit of USD 543 million during July-August of FY27 compared to the deficit of USD 853 million in the same period last fiscal year (FY26), depicting a decline of USD 310 million.
Monthly statistic showed that, Pakistan recorded a current account deficit of USD 98 million in August 2026, down by 78 percent from USD 445 million in Jul 2026.
The current account deficit also fell 70 percent year-on-year, mainly due to higher worker remittances and a reduction in the services deficit. Current account deficit was recorded USD 98 million in August 2026 as against USD 324 million in the same month last year.
Analysts said that, on a sequential basis, the narrowing trade deficit, coupled with lower dividend and interest payments and higher home remittances inflows, helped contain the current account deficit in the initial months of this fiscal year. During August 2026, Pakistan’s workers’ remittance inflows clocked in at USD 3.66 billion up from USD 3.14 billion in the same month last year.
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According to Topline, the narrower deficit was mainly supported by a USD 127 million MoM narrowing in the goods trade deficit to USD 3 billion, as imports declined to USD 5.5 billion, while exports stood at USD 2.5 billion.
The current account deficit in the initial months of this fiscal year is largely in line with the SBP’s expectations, as growth in imports of goods and services outpaced the increase in exports and robust workers’ remittances.
Going forward, the SBP believes that resilient workers’ remittances and higher ICT exports are expected to contain the current account deficit within 0 to 1 percent of GDP in FY27.
Meanwhile, the issuance of Eurobonds in September, along with significant FX purchases by SBP, helped SBP’s FX reserves increase to USD 21.4 billion.
Meanwhile, the realisation of planned financial inflows and SBP’s continued FX purchases are assessed to meet the external financing requirements and support FX reserves, which are projected to approach the 3-month import cover by end-June 2027.
Copyright Business Recorder, 2026
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