Higher exports and stable imports help reduce external account shortfall from $814 million in June
ISLAMABAD: Pakistan recorded a current account deficit of $328 million in July 2026, narrowing significantly from $814 million in June and $529 million in July 2025, according to data released by the State Bank of Pakistan (SBP) on Tuesday.
The June 2026 deficit was revised upwards to $814 million from the previously reported $649 million, highlighting a larger-than-initially-estimated pressure on the country’s external account at the end of the previous month.
The latest improvement was primarily supported by a strong increase in goods exports. Exports rose 17% month-on-month (MoM) and 9% year-on-year (YoY) to $3 billion in July, marking the highest monthly export level recorded in 19 months.
Meanwhile, imports remained broadly stable on a monthly basis at around $6.2 billion. The relatively contained import bill, combined with stronger exports, helped narrow the merchandise trade gap and provided support to the overall current account.
According to data, Pakistan’s current account remained in deficit during July, but the shortfall narrowed substantially on both a monthly and annual basis.
The latest data comes after Pakistan posted a marginal current account deficit of $139 million during fiscal year 2025-26, reversing a surplus of $1.84 billion recorded in FY25.
Despite record workers’ remittances during FY26, the external account came under pressure as imports increased while goods exports remained largely stagnant. The latest monthly figures, however, suggest some improvement in export performance at the beginning of FY27.
Pakistan’s workers’ remittances reached a record $41.6 billion during FY26, providing important support to the country’s foreign exchange position and helping cushion pressures arising from the trade imbalance.
The improvement in July’s current account is expected to provide some relief to policymakers as the government continues efforts to strengthen Pakistan’s external position. Sustained export growth, stable imports and strong remittance inflows will remain crucial for maintaining external sector stability during FY27.
Analysts are likely to closely monitor the trend in exports and imports in the coming months, particularly amid global commodity price volatility and geopolitical risks that could influence Pakistan’s trade balance and foreign exchange requirements.