Pakistan’s external account position showed a temporary improvement in January 2026, with the current account posting a surplus of $121.0 million. Despite the monthly surplus, the cumulative position during July–January FY2026 reflects a deficit of $1.1 billion, compared to a surplus of $0.6 billion recorded during the same period last year, indicating sustained pressure on the broader balance of payments.
Total exports of goods and services during Jul–Jan FY2026 stood at $23.9 billion, slightly lower than $24.1 billion recorded in the corresponding period last year. Within this figure, goods exports amounted to $18.3 billion. Services exports continued to play a stabilizing role, primarily supported by IT services, which increased by 19.8 percent to reach $2.6 billion. The continued growth in IT exports underscores the resilience of Pakistan’s technology-driven services sector in generating foreign exchange earnings.
On the import side, goods and services imports expanded to $44.4 billion, compared to $40.0 billion last year. Goods imports accounted for $36.7 billion of the total. As a result, the combined trade deficit in goods and services widened to $20.5 billion, up from $15.9 billion during the same period of the previous fiscal year. The increase in imports outpaced export growth, contributing to the overall external deficit for the fiscal year to date.
According to data released by the Pakistan Bureau of Statistics, gains were observed in key export categories. Knitwear exports rose by 2.1 percent, garments increased by 5.7 percent, and bedwear recorded a 2.7 percent rise. These segments remain central to Pakistan’s textile-driven export portfolio. On the import side, petroleum crude imports increased by 8.2 percent, while palm oil imports surged by 24.7 percent. In contrast, petroleum product imports declined by 1.8 percent, partially offsetting the rise in other energy-related inflows.
Worker remittances continued to provide critical external support. During Jul–Jan FY2026, remittances increased by 11.3 percent to reach $23.2 billion. Saudi Arabia accounted for the largest share of inflows at 23.5 percent, followed by the United Arab Emirates with a 20.6 percent share. The sustained rise in remittances has played a stabilizing role in offsetting the widening trade deficit.
Foreign direct investment recorded net inflows of $981.4 million during the period. China emerged as the largest source of net FDI inflows at $495.5 million, followed by Hong Kong at $188.4 million. Sector-wise, the power sector attracted $541.8 million, while financial services drew $462.0 million, highlighting continued investor interest in energy infrastructure and financial market development.
In contrast, portfolio investment flows reflected capital outflows. Private foreign portfolio investment recorded a net outflow of $287.6 million, while public foreign portfolio investment posted net outflows of $176.4 million, indicating cautious investor sentiment in equity and debt markets.
As of February 13, 2026, Pakistan’s foreign exchange reserves stood at $21.3 billion, including $16.2 billion held by the State Bank of Pakistan. The reserve position provides a buffer against external financing pressures, even as the cumulative current account deficit signals ongoing trade-related challenges.
Overall, January’s surplus offers short-term relief, but the broader fiscal year trend reflects elevated import demand, a widening trade gap, and reliance on remittance inflows and targeted foreign investment to maintain external stability.
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