Pakistan recorded a current account surplus of $100 million in November 2025, reversing a deficit of $291 million in October, according to data released by the State Bank of Pakistan. While the improvement provided short-term relief to the country’s external position, economists caution that the surplus was not driven by stronger exports or improved productive capacity, but almost entirely by robust remittance inflows from overseas Pakistani workers.
The latest figures highlight persistent weaknesses in Pakistan’s trade performance. Goods exports declined on a year-on-year basis during November, reflecting ongoing competitiveness challenges, price pressures, and subdued interest from corporate exporters. SBP data shows that goods exports stood at $2.27 billion during the month, while imports reached $4.73 billion, resulting in a merchandise trade deficit of $2.45 billion. The widening gap underscores the fragile nature of Pakistan’s external recovery, with imports continuing to outpace exports.
Despite stress on the trade front, the current account remained in surplus due to strong secondary income inflows, dominated by workers’ remittances. Remittance inflows reached $3.19 billion in November, pushing total secondary income to $3.46 billion for the month. These inflows more than offset deficits in the goods, services, and primary income accounts, once again placing overseas Pakistanis at the center of external sector stability.
On a cumulative basis, the July to November period of fiscal year 2026 recorded a current account surplus of $578 million, compared to a deficit of $1.88 billion in the same period last year. Analysts note that this turnaround has been largely underpinned by remittance growth rather than structural improvements in exports or foreign investment inflows.
Economists have increasingly warned that Pakistan’s heavy reliance on remittances, estimated at around $38 billion annually and accounting for roughly 10 percent of GDP, may be creating long-term vulnerabilities. Economist Atif Mian, in a recent analysis, described the phenomenon as an economic trap, where large and sustained remittance inflows fuel consumption growth without a corresponding expansion in productive capacity. This dynamic contributes to real exchange rate appreciation, making exports less competitive and discouraging investment in tradable sectors.
The situation closely resembles symptoms of Dutch disease, where external inflows crowd out manufacturing and export-oriented industries. Persistently low investment-to-GDP ratios reflect this imbalance, as overvaluation of the currency reduces incentives for productive investment. As a result, the economy becomes increasingly dependent on continuous remittance inflows to sustain household consumption and foreign exchange reserves.
Export performance in November further illustrated these structural bottlenecks. SBP data shows that goods exports contracted by 18.5 percent on a month-on-month basis, while imports expanded by 15 percent. High energy costs, limited value addition, and weak demand in key international markets continue to constrain export growth. Pakistan’s narrow export base, heavily concentrated in textiles, has left it vulnerable to global slowdowns and pricing shocks.
Although services exports, including IT-related receipts, showed some resilience, the overall goods and services deficit widened to $2.59 billion in November. Primary income outflows, largely driven by interest payments on external debt, remained elevated at $817 million, maintaining pressure on the income account and raising concerns about debt sustainability.
Behind the headline surplus lies a more sobering reality regarding the source of remittance inflows. Analysts point out that the surge in remittances does not necessarily reflect improved welfare for migrant workers. Instead, many overseas Pakistanis are sending a larger share of their earnings home to support families struggling with inflation, rising living costs, and stagnant domestic incomes.
Migrant workers, particularly those employed in construction, domestic work, and low-skilled services in the Gulf and other regions, often face job insecurity, delayed wages, extended working hours, and limited legal protections. Despite these challenges, remittance flows have remained resilient, effectively acting as Pakistan’s first line of defence against external shocks.
SBP figures indicate that workers’ remittances accounted for more than 93 percent of total secondary income inflows in November, highlighting the economy’s deep dependence on migrant earnings rather than export-led growth or foreign direct investment. While this dependence has helped stabilize the balance of payments in the short term, economists warn that it leaves Pakistan exposed to external labour market shocks and policy changes in host countries.
The November surplus offered marginal relief to Pakistan’s foreign exchange position. SBP gross reserves rose to $15.86 billion by the end of the month, while reserves excluding cash reserve and special cash reserve requirements stood at $14.68 billion. However, analysts caution that without structural reforms to boost exports, diversify the economy, and attract sustainable investment, Pakistan’s external stability will remain heavily reliant on remittances rather than durable economic growth.
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