Pakistan’s current account slipped into a deficit of $139 million during FY26, marking a reversal from the $1.84 billion surplus recorded in the previous fiscal year.
According to the data released by the State Bank of Pakistan (SBP) on Friday, the shift occurred despite record-high workers’ remittances, as a sharp rise in imports outweighed the limited growth in exports and widened the country’s trade imbalance.
Pakistan’s combined exports of goods and services increased marginally to $40.88 billion in FY26 from $40.79 billion a year earlier, representing growth of just 0.2%.
In contrast, imports surged to $76.39 billion from $70.43 billion, registering an increase of nearly 8.5%.
Workers’ remittances provided significant support to the external sector, reaching a record $41.59 billion during FY26. The figure was 8.6% higher than the $38.3 billion received in FY25.
Analysts attributed the current account deterioration mainly to the widening trade deficit, which reached its highest level since FY22. They noted that stronger import growth, combined with stagnant exports, weakened the trade balance and ultimately pushed the current account into negative territory.
Pakistan recorded a current account deficit of $649 million in June 2026, compared with a surplus of $500 million in May. The country had posted a surplus of $220 million in June 2025.
The June deficit was primarily driven by a rise in imports and a month-on-month decline in remittances, causing the overall FY26 current account position to move into a modest deficit.
Exports of goods and services rose to $3.55 billion in June from $3.2 billion in May and $3.3 billion in the same month last year.
Meanwhile, imports increased to $7.08 billion in June, compared with $6.42 billion in May and $5.92 billion in June 2025.
Workers’ remittances stood at $3.48 billion during the month, down from the record $4.25 billion received in May but slightly above the $3.4 billion recorded in June 2025.
Pakistan’s foreign exchange reserves held by the SBP stood at approximately $18.5 billion at the close of FY26, up from around $14.64 billion a year earlier. The increase strengthened the country’s external buffers amid signs of improving macroeconomic stability.
Meanwhile, Pakistan’s Real Effective Exchange Rate (REER) rose to 106.44 in June 2026 from 106.08 in May, remaining at a seven-year high and well above its 10-year average of 102.52.
A REER reading above 100 generally indicates that a country’s exports are relatively less competitive while imports become comparatively cheaper. The opposite trend is generally observed when the index falls below 100.
Pakistan’s Foreign Reserves Fall $1.25 Billion to $22.68 Billion
