Author: Shahnawaz Akhter

Karachi, October 20, 2025 – Pakistan’s current account deficit (CAD) widened by 18% year-on-year during the first quarter (July–September) of fiscal year 2025–26, according to the latest data released by the State Bank of Pakistan (SBP) on Monday.

As per the Balance of Payments report, the country recorded a current account deficit of $594 million during 1QFY26, compared to a deficit of $502 million in the same quarter last year. The increase reflects a widening gap in the balance of trade despite stronger inflows from workers’ remittances.

The SBP highlighted that the balance on trade in goods registered a deficit of $7.53 billion in the first quarter of FY2025–26, up from $6.84 billion recorded in the corresponding period of FY2024–25.

Similarly, the balance on trade in services also deteriorated slightly, posting a deficit of $931 million compared to $900 million in the previous year’s quarter. This brings the combined deficit in goods and services to $8.46 billion during July–September FY2025–26.

On a positive note, workers’ remittances rose to $9.54 billion in the first quarter of FY2025–26, compared to $8.80 billion during the same period last fiscal year — a 9% year-on-year increase, indicating continued support from overseas Pakistanis.

Economists note that while higher remittances and controlled imports helped contain the deficit, rising global oil prices and import-related pressures continue to weigh on Pakistan’s external account stability.