Pakistan’s external account deficit rises from $755 million a year earlier as the goods trade gap expands to $10.16 billion, despite stronger workers’ remittances.
KARACHI: Pakistan’s current account deficit widened to $874 million during the first quarter of fiscal year 2026-27 (July–September), compared with $755 million in the corresponding period of the previous fiscal year, according to data released by the State Bank of Pakistan (SBP) on Friday.
The latest figures indicate mounting pressure on the country’s external account, largely reflecting an expanding trade deficit in goods and a higher primary income shortfall, although increased workers’ remittances helped contain the deterioration.
The current account deficit stood at $356 million in September 2026, compared with a surplus of $133 million in September 2025. In August 2026, the country recorded a deficit of $73 million.
Pakistan’s current account deficit totalled $391 million during the entire fiscal year 2025-26.
Goods trade deficit widens to $10.16 billion
The widening current account deficit in the first quarter of FY2026-27 was accompanied by a substantial increase in the goods trade deficit.
According to the figures provided, the trade deficit in goods rose to $10.16 billion during July–September FY2026-27, up from $8.54 billion in the corresponding quarter of the previous fiscal year.
The increase reflects a widening gap between the value of goods imported and exported, putting additional pressure on Pakistan’s external payments position.
The primary income balance also remained in deficit, recording a shortfall of $2.32 billion during the first quarter, compared with $2.27 billion in the same period last year.
The larger trade deficit and primary income shortfall contributed to the deterioration in the current account balance during the opening three months of the current fiscal year.
Workers’ remittances provide support
Higher workers’ remittances helped cushion the impact of the widening trade gap and prevented the current account deficit from increasing further.
Pakistan received $11.57 billion in workers’ remittances during July–September FY2026-27, compared with $10.06 billion in the corresponding period of the previous fiscal year.
The increase in remittance inflows provided an important source of foreign exchange and helped offset some of the pressure arising from trade and primary income outflows.
Remittances remain a key component of Pakistan’s external account, supporting household incomes and contributing to the availability of foreign exchange.
However, the latest figures show that stronger remittance inflows were not sufficient to prevent the current account deficit from widening year-on-year.
External account pressures remain in focus
Pakistan’s current account position is closely linked to trade flows, workers’ remittances, income payments and other cross-border transactions. A persistent increase in the goods trade deficit can put pressure on foreign exchange reserves and the country’s external financing requirements.
The first-quarter figures highlight the importance of export growth, import management and sustained remittance inflows in maintaining external stability.
With the current account deficit reaching $874 million in the first quarter of FY2026-27, developments in trade and remittance flows will remain important indicators of Pakistan’s external sector performance during the rest of the fiscal year.