By Staff Reporter
KARACHI: The current account deficit widened to $245 million in August 2025, up from a revised $379 million shortfall in July and a $82 million deficit a year earlier, State Bank of Pakistan (SBP) data showed on Thursday, signaling challenges in sustaining the external account stability that delivered a rare annual surplus last fiscal year.
For the first two months of fiscal 2026 (July-August), the current account deficit reached $624 million, compared with $430 million in the same period of 2024, the SBP said.
Pakistan recorded a $2.1 billion current account surplus in fiscal 2025, its first in 14 years, driven by a 27% surge in workers’ remittances to $38.3 billion. However, economists warned that maintaining this positive trend hinges on sustained remittance inflows, steady export growth, and restrained import demand.
SBP data showed goods exports (free on board) at $2.51 billion in August 2025, against imports of $4.98 billion, resulting in a trade deficit of $2.48 billion. Services exports were $671 million, compared with imports of $1.108 billion, yielding a services trade deficit of $437 million.
Workers’ remittances, a key pillar of Pakistan’s external account, fell slightly to $3.14 billion in August from $3.21 billion in July but remained robust, helping to offset trade imbalances.
The August deficit underscores the difficulty of sustaining Pakistan’s external account recovery amid global commodity price pressures and domestic demand for imports. Economists noted that stability depends on resilient remittances, competitive exports, and controlled import growth.
Pakistan’s fiscal 2025 surplus was a milestone, reflecting improved economic management. Yet, the return to a monthly deficit in August 2025 highlights structural challenges, including a narrow export base and heavy reliance on remittances.
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