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Pakistan’s current account recorded a $244 million deficit in December 2025, reversing the modest surplus posted a month earlier, according to data released by the State Bank of Pakistan (SBP) on Monday.
The deficit follows a $98 million surplus in November 2025, revised from an earlier estimate of $100 million. In December last year, the current account had shown a much stronger surplus of $454 million, highlighting the scale of the year-on-year turnaround.
Trade Gap Widens
The return to deficit was largely driven by a widening trade gap, as imports continued to outpace exports despite higher remittance inflows. Pakistan’s exports of goods and services rose to $3.69 billion in December, marking an increase of nearly 20% from November’s $3.08 billion. However, the export recovery failed to offset the pressure from imports.
Total imports stood at $7.04 billion, significantly higher than export earnings. While SBP data shows imports were lower compared to earlier periods, the overall trade balance remained heavily negative during the month.
Remittances Rise
Workers’ remittances provided some relief, climbing to $3.59 billion in December, up from $3.19 billion in November, a month-on-month increase of 13%. Despite the improvement, remittance inflows were insufficient to prevent the current account from slipping back into deficit.
FY26 First-Half Turns Negative
During the first half of FY26, Pakistan recorded a cumulative current account deficit of $1.17 billion, compared with a $957 million surplus in the same period last year. Analysts attribute the shift to rising imports and weakening export performance.
“The deficit mainly reflects a sharp widening of the goods trade gap,” said Saad Hanif, Head of Research at Ismail Iqbal Securities, noting that higher imports and weaker services balance outweighed strong remittance inflows.
Waqas Ghani, Head of Research at JS Global, said the current account deterioration came despite lower global commodity prices. He added that imports during the first half of FY26 rose 12% year-on-year, while exports declined 5%, pushing the trade deficit to $15.8 billion.
Despite pressures on the current account, Pakistan’s foreign exchange reserves (excluding CRR and SCRR) rose to $16.19 billion, showing a 36% increase year-on-year. The rise suggests improved external buffers, even as structural imbalances in trade persist.
