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KARACHI: Pakistan posted a current account surplus of $121 million in January, compared to a deficit of $265 million in the previous month, the central bank data showed on Tuesday.
The country recorded $393 million current account deficit in January 2025. However, the current account was in deficit of $1.07 billion in the first seven months of the fiscal year 2026, compared to a surplus of $564 million in the same period last year.
Saad Hanif, the head of research at Ismail Iqbal Securities, said that Pakistan’s external account showed a modest improvement in January, indicating some short-term easing in external pressures, mainly supported by remittances stability and relatively contained imports. However, on a cumulative basis, the trend remains slightly weaker, reflecting normalisation of imports as economic activity recovers alongside still-moderate export growth.
“On a full-year basis, FY25 recorded a surplus of US$1.93bn versus a deficit of US$2.07bn in the preceding year, largely driven by lower imports and strong remittance inflows rather than structural export strength. This suggests that while external stability has improved, sustaining a durable surplus will depend on export expansion and prudent management of import demand going forward,” Hanif said.
The SBP expects the current account deficit to stay within 0-1 percent of GDP, as strong remittances offset the wider trade gap and increase foreign exchange reserves beyond the targets set by the International Monetary Fund’s loan programme. The SBP anticipates that its forex reserves will rise to $18 billion by June 2026, with further increases expected in FY27, potentially covering nearly three months of imports. The SBP data showed that the real effective exchange rate depreciated to 103.3 in January, compared to 103.6 in December.
