KARACHI: Pakistan’s current account deficit (CAD) surged by more than 255 per cent year-on-year during the first four months of FY26, driven largely by rising imports and stagnant exports, according to data released by the State Bank of Pakistan on Monday. The country recorded a CAD of $733 million in July-October, compared with $206 million during the same period last year.
October alone saw a $112 million deficit, a sharp contrast to a $83 million surplus in September. Experts attribute the widening CAD to higher import volumes, while exports showed little growth amid ongoing economic challenges. The government, under pressure from the International Monetary Fund (IMF), had relaxed import restrictions to ease pressure on the external account.
Read More: Pakistan’s current account posts $110 million surplus in Sept 2025
Imports of goods and services during the first four months of FY26 rose to $24.919 billion, up from $22.647 billion in the corresponding period of FY25. Exports, however, remained relatively flat at $13.664 billion, slightly higher than last year’s $13.041 billion. As a result, the trade deficit widened to $11.255 billion, compared with $9.606 billion in FY25.
Despite the rising CAD, some external indicators remain positive. Remittances in October reached $3.4 billion, up from $3.2 billion in September, with overall remittances during the first four months surpassing policymakers’ expectations. The government anticipates total remittances of $40 billion in FY26, boosted in part by support from Saudi Arabia and the United States.
Read More: Current account posts $112 million deficit in Oct
Analysts warn that if the current account deficit persists, it could undermine the country’s economic stability and foreign exchange reserves. “The current account deficit is crucial for the stability of Pakistan’s external accounts and maintaining a stable exchange rate. Continued pressure could be damaging to both the economy and the country,” one analyst said.