Pakistan’s external sector demonstrated a notable shift in February 2026, as the country recorded a current account surplus of $427 million. This monthly performance has been instrumental in stabilizing the national balance of payments, effectively narrowing the cumulative deficit for the July-February FY2026 period to $700 million. While the monthly surplus offers a breather for the economy, the broader trade landscape remains complex. Total exports of goods and services for the fiscal year were recorded at $27.2 billion, a slight dip from the $27.4 billion reported in the previous year. Within this figure, goods exports reached $20.7 billion, largely sustained by the resilience of the textile sector, which continues to be the backbone of the country’s trade earning capacity.
A standout feature in the current economic update is the rapid expansion of the digital economy. Services exports have been primarily energized by the Information Technology sector, which witnessed a substantial growth of 19.7 percent, reaching $3.0 billion. This surge in IT earnings highlights a transition toward high-value service exports, providing a crucial cushion as traditional sectors face challenges. On the other hand, the import of goods and services climbed to $50.4 billion compared to $46.0 billion in the prior year, with goods alone accounting for $41.8 billion. This upward trajectory in imports, contrasted with relatively stagnant export growth due to a decline in food shipments like rice, has caused the trade deficit to widen to $23.2 billion.
Despite the widening trade gap, specific manufacturing segments showed positive momentum according to the latest data. Knitwear exports saw a modest gain of 0.4 percent, while readymade garments and bedwear increased by 4.9 percent and 1.0 percent, respectively. On the import side, the energy and commodities sectors showed mixed results; petroleum crude imports rose by 6.6 percent and palm oil surged by 21.5 percent, while the import of refined petroleum products actually decreased by 6.2 percent. These fluctuations reflect the ongoing adjustments in global commodity prices and domestic industrial demand as the country navigates its fiscal year objectives.
The financial account was bolstered by strong inflows from the Pakistani diaspora and foreign investors. Remittances grew by 10.5 percent to reach $26.5 billion, with the largest contributions coming from Saudi Arabia and the UAE, holding shares of 23.3 percent and 20.6 percent respectively. Foreign Direct Investment (FDI) also remained positive with net inflows of $1.2 billion, primarily sourced from China and Hong Kong. The power and financial business sectors remained the most attractive destinations for international capital. Although there were net outflows in portfolio investments, the overall reserve position remains stable. As of March 19, 2026, total foreign exchange reserves stood at $21.7 billion, with $16.4 billion held by the State Bank of Pakistan, providing a significant buffer for the national economy.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.