Pakistan’s external sector reflected mixed trends during the first five months of FY2026, as improving economic activity led to higher imports while strong remittance inflows continued to cushion the current account. In November 2025, the current account recorded a surplus of $100 million. However, on a cumulative basis, the current account posted a deficit of $812 million during July to November FY2026, compared to a surplus of $503 million recorded in the same period last year.
During Jul-Nov FY2026, exports of goods declined by 3.2 percent to $12.8 billion, while imports increased by 11.1 percent to $25.6 billion. As a result, the trade deficit widened to $12.8 billion, compared to $9.8 billion in the corresponding period of the previous year. The rise in imports reflects higher domestic demand and increased economic activity, particularly in energy and essential commodities.
According to data from the Pakistan Bureau of Statistics, selected export categories showed positive performance despite the overall decline. Exports of knitwear increased by 5.7 percent, garments by 5.9 percent, and bedwear by 5.0 percent, indicating resilience in value-added textile segments. On the import side, notable increases were recorded in petroleum crude imports, which rose by 13.4 percent, petroleum products by 4.0 percent, and palm oil by 33.2 percent, contributing to higher import payments.
The services sector provided some relief to the external account. Exports of services grew by 16.7 percent to $3.8 billion during Jul-Nov FY2026, while imports of services increased by 12.8 percent to $5.1 billion. This resulted in a services trade deficit of $1.3 billion, broadly in line with the deficit recorded in the same period last year. Within services exports, information technology exports showed strong growth, increasing by 18.5 percent to $1.8 billion, reflecting sustained global demand for Pakistan’s IT services.
Workers’ remittances remained a key source of external stability, rising by 9.3 percent to $16.1 billion during Jul-Nov FY2026. Major inflows originated from Saudi Arabia, which accounted for 24.2 percent of total remittances, followed by the United Arab Emirates with a 20.8 percent share. The steady growth in remittances helped offset pressures from the widening trade deficit.
Net foreign direct investment inflows amounted to $927.4 million during the period, with China contributing $308.4 million and Hong Kong $143.3 million. Sector-wise, the power sector attracted $383.8 million, while financial services received $327.6 million in FDI inflows. Meanwhile, private and public foreign portfolio investments recorded net outflows of $192.2 million and $421.6 million, respectively.
As of December 19, 2025, Pakistan’s foreign exchange reserves stood at $21.0 billion, including $15.9 billion held by the State Bank of Pakistan. Overall, while higher imports widened the current account deficit, robust remittances, IT exports, and stable reserves continued to provide support to the external sector.
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