ISLAMABAD: Pakistan’s external sector remained broadly stable during July-March FY2026, although the current account surplus narrowed sharply to $72 million from $1.7 billion recorded during the same period last year, reflecting a widening trade deficit amid rising economic activity.
According to the Economic Survey of Pakistan for 2025-26, the country’s goods trade deficit expanded to $27.9 billion, compared with $22.7 billion a year earlier, as imports increased by 6.9 per cent in response to improving domestic demand and economic recovery.However, the services sector provided some relief, with the services trade deficit narrowing to $2.1 billion from $2.3 billion last year. The improvement was driven by stronger export performance, particularly a 19.8 per cent surge in IT exports.
The primary income account deficit also improved, declining by $364 million to $6.4 billion, mainly due to lower interest payments on external obligations.A major support to the external account came from overseas Pakistanis, whose remittances rose by 8.2 per cent to a record $30.3 billion, helping offset pressure from the wider merchandise trade gap.
Meanwhile, the financial account posted a net inflow of $194 million, a significant turnaround from the $1.0 billion net outflow recorded during the corresponding period last year. The improvement was largely attributed to higher official loan disbursements.
