The State Bank of Pakistan has reported concerning figures about the country's external economic position, revealing a significant shift in the current account balance during the ongoing fiscal year.
Monthly Performance Deterioration
According to data released by the central bank on Monday, Pakistan's current account balance recorded a deficit of $112 million in October 2025. This represents a sharp reversal from the previous month, when the country enjoyed a surplus of $83 million in September 2025. The monthly fluctuation indicates ongoing volatility in the country's external account management.
Cumulative Deficit Widens Significantly
The broader picture reveals even more concerning trends. The cumulative current account deficit for the first four months of fiscal year 2025-26 reached $733 million. This marks a substantial increase compared to the same period last year, when the deficit stood at $206 million during July to October of FY25.
The trade in goods balance shows particular strain, with the July-October 2025-26 period recording a massive deficit of $10,091 million. This represents a significant widening from the $8,477 million deficit recorded in the corresponding period of the previous fiscal year.
Detailed Trade Performance Analysis
Breaking down the October 2025 performance, the balance on trade in goods was recorded at $2,527 million deficit, worsening from September's $2,425 million deficit and substantially higher than October 2024's $1,642 million deficit.
The services sector also contributed to the overall deficit, with the first four months of FY26 showing a services trade deficit of $1,164 million, slightly higher than the $1,130 million deficit in the same period last year. October alone saw a services deficit of $226 million, compared to $205 million in September and $230 million in October 2024.
Combining both goods and services, the overall trade deficit reached $11,255 million during July-October FY26, significantly higher than the $9,607 million deficit recorded in the first four months of the previous fiscal year.
Bright Spots in Remittances
Amid the challenging trade figures, some positive developments emerged in remittance flows. Workers' remittances from overseas reached $12,955 million during the first four months of FY26, showing healthy growth from the $11,852 million received in the corresponding period of FY25.
This strong performance in remittances contributed to a surplus of $13,612 million in secondary income during July-October FY26, improving from the $12,488 million surplus in the first four months of the previous fiscal year.
The primary income account recorded a deficit of $3,090 million during the July-October FY26 period, nearly identical to the $3,087 million deficit in the same months of the last fiscal year.
These figures collectively paint a picture of an economy facing significant external sector challenges, particularly in merchandise trade, while continuing to benefit from strong remittance inflows that help cushion the overall impact on the current account.
