Pakistan’s current account balance shifted to a deficit of $244 million in December 2025, according to recent figures released by the State Bank of Pakistan (SBP). This marks a reversal from a surplus of $98 million in November 2025 and a $454 million surplus recorded in December 2024.
Trade and Remittance Figures
The deficit primarily resulted from a notable rise in the import bill during December. Exports of goods and services reached $3.69 billion, representing an increase of nearly 20% compared to $3.08 billion in November 2025.
Conversely, imports totaled $7.04 billion in December, reflecting a decrease of about 24% from $5.69 billion in the previous month, as per SBP data.
Worker remittances also showed positive momentum, rising 13% month-on-month to $3.59 billion in December, up from $3.19 billion in November 2025.
Half-Year Performance and Expert Insights
For the first half of fiscal year 2026 (H1FY26), the current account recorded a cumulative deficit of $1,174 million, contrasting with a surplus of $957 million during the same period last year.
Saad Hanif, Head of Research at Ismail Iqbal Securities, attributed the deficit mainly to a significant widening of the goods trade gap. He noted that increased imports, weaker exports, and a deteriorating services balance outweighed robust remittance inflows, reversing the surplus seen in November.
Waqas Ghani, Head of Research at JS Global, echoed these views, highlighting that the deficit stemmed from a sharp rise in imports despite lower global commodity prices and higher remittances. He expects the current account to close the fiscal year with a deficit driven by rising imports.
Ghani further pointed out that imports grew 12% year-on-year during the first half of FY26, reflecting economic normalization and increased demand for intermediate goods, while exports declined 5% year-on-year, maintaining a wide trade gap of $15.8 billion.
Foreign Exchange Reserves
Meanwhile, Pakistan’s foreign exchange reserves (excluding CRR/SCRR) increased to $16.19 billion, marking a substantial 36% rise compared to the previous year. This improvement indicates stronger external buffers despite ongoing structural pressures on the current account.
