Pakistan’s current account swung back into a deficit of about USD 649 million in June 2026, reversing the previous month’s surplus as workers’ remittances declined and imports rebounded sharply, leaving the country with a marginal external deficit for fiscal year 2026.
According to State Bank of Pakistan (SBP) data, the country recorded a current account deficit of about USD 139 million in FY2026, compared with a surplus of USD 1.84 billion in FY2025.
The deterioration in June was primarily driven by an 18% month-on-month decline in workers’ remittances to USD 3.5 billion, following a record USD 4.3 billion in May, along with a 9% increase in imports from the previous month. Exports, according to SBP data, rose about 10% from May.
Data from the Pakistan Bureau of Statistics (PBS) showed the goods trade deficit widened to USD 4.5 billion in June from USD 2.8 billion in May, as imports surged 24% month on month to about USD 6.9 billion.
Petroleum imports climbed about 33% from the previous month to USD 1.9 billion, while non-energy imports also increased, with food imports the only notable exception.
Trade data presented a mixed picture for exports. While SBP figures showed exports increased about 10% from May, PBS data indicated weaker momentum, with textile exports declining about 23% and total exports falling 16% to USD 2.3 billion.
Despite the monthly slowdown, remittances remained above the USD 3 billion mark. For the full fiscal year, inflows rose about 9% from a year earlier to USD 41.6 billion, continuing to support Pakistan’s external account and helping offset the country’s structural trade deficit.
Meanwhile, the SBP’s foreign exchange reserves rose about 7% from the previous month to USD 18.5 billion, reflecting improved external liquidity.
Analysts said Pakistan’s external position remains broadly manageable despite the weak June reading, with the annual current account deficit remaining negligible by historical standards.
"The June deficit largely reflects seasonal pressures from higher imports and the normalization of remittance inflows after May’s exceptional performance. Remittances continue to provide a strong cushion, while higher foreign exchange reserves have improved the country’s resilience to external shocks," analysts said.
Looking ahead, analysts expect Pakistan’s current account to remain within the SBP’s guidance of 0% to 1% of gross domestic product in FY2027. However, they cautioned that higher global oil prices amid renewed tensions in the Middle East pose upside risks to both the current account and inflation.
"Stronger remittances and healthier reserve buffers should help mitigate near-term external pressures, although sustained increases in energy import costs could widen the external deficit if oil prices remain elevated," they said.
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