By Staff Reporter
KARACHI: Pakistan’s current account swung to a deficit in December as a surge in imports overwhelmed rising exports and remittances, pointing to the fragility of the country’s external position even as foreign reserves continue to climb.
The shortfall reached $244 million in the last month of 2025, flipping a $98 million surplus in November that had first been estimated at $100 million, according to State Bank of Pakistan data published Monday. A year earlier, the figure was a $454 million surplus.
Imports drove most of the deficit, outpacing solid gains in exports and money sent home by workers overseas. Exports of goods and services rose almost 20% from the previous month to $3.69 billion, while imports climbed around 24% to $7.04 billion.
Remittances, a key pillar of Pakistan’s economy, rose 13% to $3.59 billion in December from $3.19 billion in November, providing some cushion but not enough to keep the current account in positive territory.
In the first half of fiscal 2026, which ends in June, the current account showed a total deficit of $1.174 billion. That reverses the $957 million surplus from the same stretch last year, as higher global commodity costs and stronger local demand added pressure.
“The deficit comes mainly because of a sharp widening in the goods trade gap,” said Saad Hanif, head of research at Ismail Iqbal Securities. He added that higher imports, weaker exports and deterioration in services balance “outweighed still-strong remittance inflows, reversing November’s surplus.”
Even with these current account stresses, Pakistan’s foreign exchange reserves excluding cash reserve requirements and special cash reserve requirements advanced to $16.19 billion, up 36% from the prior year. The rise reflects better external cushions, although issues like energy imports and soft overseas demand for textiles keep weighing on the balance of payments.
Copyright © 2021 Independent Pakistan | All rights reserved
